World Grain -- December 2013 - 8

from the editor-in-chief

Dynamic global
milling in new data

efore commenting on how much there
is to learn from the latest data of the
International Grains Council (IGC) on
flour production around the world, it is appropriate to thank the Council for assembling
this information. Even though gathering statistics on milling may appear to be a basic
responsibility of the Council, it is increasingly apparent that such a task is difficult.
When one sees Italy, Australia and China as
three instances of nations that do not provide
the IGC with current wheat flour output information, in the face of efforts pressing for
cooperation, an observer may only conclude
that resistance reflects viewpoints that are
difficult, if not impossible, to fathom.
While rejecting the conclusion that a nation like China may consider output a "secret," it is much easier to blame the absence
of numbers on statistical shortfalls. Providing some insight was a study done this year
by the U.S. Economic Research Service on
Afghanistan becoming a major importer of
flour. Even though milling still ranks as the
country's largest (non-opium) agroindustry,
its capacity has been decimated by constant
war. Imports mainly come from neighboring Pakistan whose government subsidizes
wheat prices to give its millers an advantage.
Afghanistan's mills are mainly small stone
or disk grinding units with daily capacity of
1 to 3 tonnes. Consumption growth, at 9%
per year, has outrun milling capacity to a degree very different from other nations.

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Fundamental to examining flour output is
surveying how individual nations perform
compared with other nations in the same region as well as globally. Although it is some
years since the IGC has made an estimate of
world flour production, it comes nearest by
assessing food use of wheat. The latest IGC
forecast of food use is 471 million tonnes,
accounting for 68% of global wheat disappearance at 690 million. While nearly all of
food use represents milling or grinding, the
total is impossible to convert accurately into
flour. From developed nations where modern
milling systems operate at extraction rates
near 75% to primitive single-person grinding units that make whole wheat products,
the range is so huge as to prevent a global estimate of how much flour is made. Suffice it
to rely on the Council's estimate that aggregate food use has been increasing recently
at an annual pace of hardly 1%, which lags
global population gains at slightly more than
the single digit.
Before saying growth in global demand
is disappointing, it becomes essential to differentiate between national trends. Here is
where the IGC statistics are particularly valuable. They affirm that flour output in most
developed nations is holding steady, if not
even decreasing in a few places, contrasting
with developing nations that enjoy economic
growth and expanded middle classes relating
directly to expanded demand for foods made
from wheat flour. Central and Eastern Europe

provide particularly powerful examples of
economic gains, with yearly flour output increases of 23% in both Poland and the Czech
Republic. Similar gains occurred in a few of
the former Soviet Union satellites.
Hardly anything explains spurts in flour
production better than the nations that have
been supplying flour to neighboring countries that have experienced food demand
growth. Turkey is among the major beneficiaries of this development, enjoying a 55%
gain in flour production between 2007 and
2011. Data are missing for Pakistan that
has been the prime beneficiary of population growth in war-torn Afghanistan where
domestic milling has fallen into disrepair.
In the Western Hemisphere, Argentina's
milling has gained from Brazil's expanding
consumption, even as the latter's milling industry has been fast growing.
North America and Western Europe have
flour totals that are relatively steady, as well
as domestic industries with venerable histories that are highly competitive in a classic unfolding of the modern milling story.
Based on the IGC data issued this year, it
is apparent that milling continues to be dynamic, even as the industry's course varies
dramatically among countries. (For more
on this topic see the feature on page 60 of
this issue.)

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WORLD GRAIN (ISSN 0745-8991) Volume 31, issue 12,

Morton I. Sosland
Editor-in-chief

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