DUBAI, UNITED ARAB EMIRATES — What strategies should millers and traders adopt in a bearish wheat market marked by overcapacity and geopolitical risks? This pressing question was a key theme of the 34th Annual IAOM Mideast & Africa Conference & Expo, held at the Dubai World Trade Centre in the United Arab Emirates.

Despite widespread concerns about pricing pressures, the event carried an undercurrent of optimism as the industry looked toward 2025.

Ali Habaj, regional director of IAOM MEA, set the tone in his opening address, acknowledging current global challenges but emphasizing hope for the future. Habaj noted the conference’s enduring success, with nearly 1,000 delegates, 146 millers, 94 exhibitors and 162 traders in attendance this year.

The challenges posed by geopolitical instability and disruptive technologies were a central theme. Riaz Shah, professor of practice at Hult International Business School, delivered a keynote address urging traders and millers to embrace uncertainty and disruptive technologies such as Generative AI.

“The future is really uncertain and more uncertain now than it was last month,” Shah said.

He advised attendees to focus on asking the right questions, emphasizing that “wisdom is not founded in certainty.”

Ieva Serksnyte, senior trader, ME Solaris Commodities, said that despite tanking wheat prices, there was more stability now on wheat flows and shipping routes than there was two years ago when markets were reeling from Russia’s invasion of Ukraine. This stabilization, Serksnyte explained, is a significant positive for global food supply, even as the industry grapples with the long-term effects of conflicts in the Black Sea and around the Red Sea.

Exhibitor highlights

Exhibitors at IAOM MEA showcased a range of innovations and strategies aimed at addressing the evolving needs of the grain industry. Sven Mattutat, global head of product management at Mühlenchemie, said the company’s regular participation at the event was designed to showcase its latest visions and innovations. He noted the rising popularity of couscous as a new challenge for the milling industry, reflecting broader shifts in consumer preferences.

Norman Loop, Mühlenchemie’s regional director for EMEA, said he was optimistic for the region in 2025, noting that one in four people will be African within a few decades so the region will be crucial as Mühlenchemie grows and expands alongside the “milling family.”

“The future is really uncertain and more uncertain now than it was last month.”

Both Mattutat and Loop underscored the transformative potential of AI in the milling sector. They noted that AI will fundamentally change the way companies operate, requiring rapid adaptation through investments in technology and talent.

Other exhibitors shared similarly upbeat perspectives. Yagiz Seymen, sales specialist at Alapala, told World Grain that customers in the Middle East and Africa were “not hesitating” to invest despite geopolitical uncertainties, although smaller firms were proving more cautious.

“We have lots of inquiries and lots of realized projects,” he added.

Looking ahead, Seymen sees the biggest opportunities in countries like Ivory Coast, Morocco, Sudan and Saudi Arabia.

Nicolas Deschamps, managing director of Vigan, said the Middle East and North Africa (MENA) region is “very important for Vigan,” adding that the Belgian ship unloader manufacturing giant has “unloaders all over the region.” He told World Grain that sales of the company’s newest model — the NIV800 pneumatic grain unloader — were strong, with five big contracts around the world already secured “in South Korea, the Middle East, Morocco, Belgium, and Peru,” and more in the pipeline.

Touraj Goudarzi, executive director of sales and projects at Neuero, said the company’s presence at the exhibition was crucial to demonstrating its latest technologies for grain handling equipment like ship unloaders and loaders to a “huge potential” regional market, as customers increasingly demand sustainable and energy-efficient solutions. To meet this demand, he said Neuero has made significant improvements to its drive technology and is using carbon fiber components to reduce power consumption and improve reliability.

Roberto Reggianini, area manager, Ocrim, said the Middle East and African market is strategically important for the company, with Saudi Arabia one of its biggest markets and plans to open a new office in Dubai moving forward. Africa will be “one of the fast-growing markets” in the future, though he acknowledged Ocrim faced price-based competition.

Challenges in global trade

Turkey’s decision to ban wheat imports earlier this year was deemed worthy of a full panel session due to its impact on wheat demand and the milling market. Turkey has imported around 10 million tonnes of wheat each year over the past five years, making it one of the world’s largest importers. It is also a major exporter of flour and pasta.

The aim of the wheat import ban, the future of which was being finalized as World Grain went to press, was to protect Turkey’s domestic wheat producers from global prices that Dan Basse, president and founder of AgResource Co., said had now fallen to five-year lows.

Panelists noted that Turkey’s likely dip in its flour exports would create opportunities for competitor millers in African markets. However, the reduced demand for Black Sea wheat is adding pressure to an already oversupplied global market.

Black Sea and beyond

The Black Sea region, which produces 20% of the world’s wheat (excluding China) and accounts for 30% of global exports, remains a critical player in the grain trade. Indrek Aigro, head of grains at Copenhagen Merchants, said wheat under production in the region had declined by some 9 million tonnes over the last year, mostly due to Russia, Ukraine, Bulgaria and Romania “performing relatively well.”

This will result in an 11-million-to-12-million-tonne decline in exports this year, although this could rise to 15 million tonnes. The main feature of Russian exports over the last year has been the emergence of new sales destinations.

With lower demand from Turkey, Russian exporters are penetrating traditional EU destinations, including western Africa plus Morocco in the north, said Aigro. Another growing market for Russia is Latin America, where it now exports 2.5 million tonnes per year. Volumes are likely to grow in the future as a Donald Trump presidency in the United States alters the geopolitical landscape and increases the ties between BRICS nations.

“We see and believe that (Russia is) able to build up that market share to even 5 million or 8 million tonnes in the future within the BRICS framework with potential trade wars coming up with a new presidency in the US,” he said.

“The wind is blowing in that direction and the logistics work quite well because Russian wheat is not only coming out of the Black Sea, but there is also a 4-million-tonne flow of Russian wheat out through the Baltic Sea and, logistically, South America is a very well placed for that wheat flow.”

Shifting trade patterns

In the United States, improved growing conditions in the Southern Plains have boosted wheat production prospects. Ian Flagg, regional vice president of US Wheat Associates, reported a significant increase in yields in Kansas and Oklahoma, resulting in an overall production estimate of 54 million tonnes, up from 49 million tonnes last year.

Export volumes are expected to reach 22.5 million tonnes, in line with the five-year average but down from the 20-year average. Flagg noted growing interest from non-traditional buyers, including Thailand, Indonesia and Brazil, as price-sensitive markets seek alternatives.

“So far, the pace of sales has been pretty decent,” he added. “We have commitments for around 14 million tonnes, so around 62% of expected sales.”

In Australia, exports are set to climb to 33 million tonnes in 2024-25, up from just over 25 million tonnes a year earlier, said Don Campbell, general manager-international at GrainCorp. Reflecting on the challenges posed by climate variability, Campbell likened the wheat season to a movie re-run, with “the usual bad guy — El Niño — and the usual actors like temperature, rainfall and frost.”

Canada also is maintaining strong export levels. Jeffrey McPike, broker/analyst at WASEDA Commodities, projected shipments of 25 million tonnes, similar to 2023 and significantly higher than 2022 levels of 14.8 million tonnes. Amid the bearish market, advice for buyers was in no short supply. McPike urged delegates to remain vigilant and act decisively.

“You have to listen to the market,” he said. “The market’s telling you it’s got too much supply. Russia is exporting using what’s their one tool they have? Price.”

McPike warned against complacency, citing historical instances where unexpected events led to dramatic price spikes.

“Don’t wait,” he advised. “If you want food security, don’t wait until it’s under $200 a tonne. Get some now.”

Realpolitik 

Basse was also on hand to offer his usual sage advice (see December World Grain for a full-length exclusive interview with Basse). He warned that the world was undergoing a dramatic geopolitical realignment as the era of US-led globalism comes to an end. Basse said Trump would impose a range of import tariffs, not least on China.

 Retaliation would be traumatic for US farming exporters and would create new opportunities for alternative sources, Basse said.