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ACAPS Thematic Report - Yemen: Global wheat supply dynamics and their impact

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KEY MESSAGES

  • Import data and anecdotal evidence from sources in Yemen monitoring local market dynamics indicate that there are sufficient wheat supplies in the country. Wheat is readily available for purchase. The problem is affordability.

  • International wheat prices started decreasing at the end of June 2022 and decreased further after the signing of a grain export agreement between Russia and Ukraine on 22 July. The reduction in international wheat prices is expected to result in increased imports to Yemen in the coming months, as traders look to take advantage. Wheat imports to the ports of Aden and Mukalla (Southern ports) controlled by the Internationally Recognized Government of Yemen (IRG) had already increased in July compared to the previous two months. Overall, the monthly average between March–July 2022 was 5% above average for the Red Sea ports (Al Hodeidah and Saleef) and 16% lower for the Southern ports.

  • Global wheat production for 2022–2023 is expected to be at 771.6 million MT (down from 779 million MT in 2021–2022) as increased production in Canada, Russia, and the US would only partially offset the reduced Argentina, EU, and Ukraine production estimates. As at July, projected exports for 2022–2023 were at 206.6 million MT.

  • The time and cost of the wheat supply chain from different source countries to Yemen seem to vary based on a number of factors. Currently, India offers the most affordable wheat, with an estimated landed cost of USD 381 per MT, followed by Ukraine (USD 421/ MT), Russia (USD 423/MT), the US (USD 447/MT), and Australia (USD 456/MT). The delivery time from the loading port to the entry port in Yemen ranges between six weeks and three months (depending on the country of export).

  • Given increased global competition over wheat imports and the challenges that Yemeni importers have been facing even before the war in Ukraine (including financial and logistical constraints), the international community needs to provide additional support to Yemen to prevent the food security situation in the country from deteriorating further.