Rice is on the Back Burner: Asia has Become the Largest Growth Market for Wheat Imports
Asia is turning away from its long-held staple, rice, in favor of bread and pastries, and this trend is especially apparent in South Korea.
Since 2008, throughout Asia, wheat demand has risen at twice the rate of rice consumption, making Asia the fastest growing growth market for wheat imports, buying more than 40 million tons per year, or 25% of global trade over the past five years.
Last year South Korean consumers spent US$5.37 billion on bread, sandwiches, bagels, and pastries, according to SPC Group, owner of Asia’s biggest bread plant, pushing flour consumption to its highest point since 2006 at 33.6 kilograms per person, while the country’s rice consumption fell to a record low of 65.1 kilograms per person per year last year.
The rise in Asian wheat consumption is also being attributed to a growing middle class opting for convenience foods, such as pizzas and sandwiches, and an increase in noodle consumption. In Indonesia, the world’s second biggest importer, noodle consumption has driven wheat demand up by 60% since 2005 to nearly 8 million tons per year. And in India, the world’s second biggest wheat producing country, consumption is expected to outpace supply by more than 5 million tons this year, resulting in the highest volume of imports in eight years. In China, aside from soaring demand for noodles and pizzas, the consumption of cakes and pastries has become a symbol of affluence and lifestyle – shifts which have driven wheat demand to a record 118 million tons in 2014.
Across much of Asia, wheat production is low. South Korea produces only between 1% and 2% of its demand, leaving the country heavily dependent on imports. This has been a boon for the world’s top wheat exporters including the U.S., Australia, Russia, Ukraine, Canada, and the EU, which have seen exports increase by more than 40% over the past ten years, but it also is a strain on these countries' production systems, which must produce bumper crops each season to keep pace with demand.