Profile of MENA Region Wheat Commodity Market
Although wheat is central in MENA diets, wheat cultivation in the region is significantly constrained by the arid climate and limited water availability. While some production is rain-fed, highly variable annual rainfall, particularly in Morocco and Turkey, contributes to variations in yields, often resulting in large swings in import demand. The MENA region’s growing incomes imply a gradual diversification away from wheat into more expensive food products, including meats. However, governments throughout the region tend to ensure supplies of this key food staple through policies that support both wheat producers and bread consumers and prioritize adequate levels of imports. In combination with robust population growth, this important staple is expected to be in steady demand in the years to come.
Given the production conditions and the strong demand in the region, wheat consumption has exceeded production and the region continues to rely heavily on imports. Historically, much of this supply originated in the United States, but the past 20 years have seen a sizeable drop in the U.S. share of wheat imports into the MENA. Limited growth in U.S. wheat output, coupled with growing competition from Black Sea countries and the European Union, have reduced the U.S. share of the region’s wheat imports to around 10 percent in recent years, down from around 30 percent in the 1990s.
The largest buyer of U.S. wheat in the region is Egypt, accounting for slightly more than half of all U.S. exports to the MENA, though year-to-year volumes have fluctuated dramatically, most recently due to political turbulence. The next largest buyer of U.S. wheat is Yemen. Meanwhile, with recent policy changes in Saudi Arabia to de-emphasize domestic wheat production, the expectation is that Saudi wheat imports will expand and U.S. wheat will play a role in meeting that country’s import demand. Turkey, Algeria, Israel, and Morocco are also major importers of U.S. wheat, though the pattern of shipments over time has been volatile, reflecting these rain-dependent producers’ own unpredictable harvests.
