Rising wheat demand in Asia points to higher wheat prices in long term

The wheat price on the CBOT shed 2.3% yesterday and closed trading at 508 US cents per bushel. Weather forecasts are predicting possible rainfall in parts of the U.S. winter wheat growing areas, which should have a positive impact on plant development. 

The dry conditions to date have delayed planting as well as the germination of those plants already sown. In the long term, wheat prices should climb again on the back of growing demand from Asia, says Commerzbank. In the past five years, Asia has imported more than 40 million tons of wheat per year on average, which accounts for roughly 25% of worldwide imports. 

According to official government data from South Korea, annual per capita flour demand increased to its highest level since 2006 (33.6 kg). By comparison, per capita rice demand dropped to a record low of 65.1 kg. If this trend were to continue, Asia's import needs would continue to grow.