Projections of MENA Grain Market Through 2024

The MENA region’s rising incomes and above-average population growth are projected to drive its consumption growth across a variety of agricultural commodities over the next 10 years. Given the region’s natural constraints on production, the USDA projections point to a correspondingly large rise in total imports. Certain assumptions underlie the USDA long-term projections (see Box, “USDA Agricultural Projections to 2024”). One of the key assumptions is the continuation of current government policies. Given uncertainty about the stability of several governments in the MENA region, such an assumption is likely to prove tenuous. Projections for Iraq and Egypt must be treated with particular caution as these countries continue to experience political tensions. Similarly, projections for the OME category, which includes Syria and Yemen, must be interpreted with caution due to the persistence of civil conflict and political turmoil.

By far the largest field crop by area in the MENA, wheat is currently cultivated on about 26 million hectares. This area is projected to rise about 0.4 percent annually through 2024. Combined with somewhat slow growth in yields, production is expected to grow at a relatively low 1.3 percent annually over the projection period.

Over 90 percent of MENA’s wheat is destined for direct human consumption, primarily in the form of bread. The most populated countries in the region, Egypt, Turkey, and Iran, will remain the top wheat consumers over the next 10 years. But the region’s fastest consumption growth is projected to occur in Iraq, assuming current political conditions there do not deteriorate. As described above, rising populations and production constraints imply a growing role for imports across the MENA. Egypt is projected to remain the region’s largest wheat buyer, with imports accounting for nearly 60 percent of its own consumption. Recently, imports into Egypt have shown large swings due to the country’s economical turmoil. Forecasts of Egypt’s wheat imports, therefore, must make strong assumptions of stability and unchanging policies toward producers and consumer subsidies.

Saudi Arabia’s import dependence, meanwhile, is even greater than Egypt’s and is projected to approach 100 percent by the end of 2024. The aggregate regions of ONA and OME are also projected to become among the largest importers by 2024. The OME group includes Yemen, where recent political upheavals, combined with the country’s heavy dependence on imported wheat, inject additional uncertainty into the region’s overall wheat profile.

For rice, MENA production is expected to grow only 0.5 percent over the 10-year projection period. As noted, constraints on available arable land and underground water supplies combine to limit the area and yield growth of the region overall. Egypt remains the largest rice consumer in the region, and its domestic production adequately covers demand, positioning it to sell excess quantities on the world market. Rice imports play a less important role than wheat in satisfying the country’s consumer demand, and uncertainties about Egypt’s political stability may have less effect on rice import projections.

The MENA region’s number two rice consumer, Iran, relies on imports to meet over half of its demand and is expected to continue importing high levels as its population grows over the projection period. Other significant rice consumers are Iraq and Saudi Arabia, both of which rely even more heavily than Iran on imports as a percentage of consumption and whose imports are expected to grow over the next 10 years. Again, projections concerning Iraq’s rice imports are tempered by uncertainties surrounding its recent history of civil conflict.