Russia has become the world’s largest wheat exporter. At the same time, Ukraine faces challenges that could lead to a significant reduction in wheat supplies. Ukraine’s wheat exports are expected to more than halve from their previous peak, and wheat production will be at an 11-year low.
The United States Department of Agriculture (USDA) estimates record wheat exports from Russia at 45.5 million tonnes (mt) in 2022-2023. (cycle from July to June). In the previous three market years, Russia’s record wheat exports were 33 tons, 39.1 tons and 34.5 tons. With such growth last year, Russia has surpassed the record of the European Union, which holds the record of 39.8 tons in 2019-2020.
In addition, wheat exports from Russia are expected to reach a new high of 47.5 tons in 2023-2024. If this new record is achieved, it will surpass the records of the European Union, Australia, Argentina and Canada. This growth in Russian exports is to the detriment of Ukraine.
Wheat exports from Ukraine decreased from 21 tons in 2019-2020 to 16.8 tons in 2022-2023. Not to be overlooked, wheat exports from Ukraine are forecast to fall further to 10.5 tonnes in the next marketing year. USDA estimates that domestic production could also drop to 17.5 tons. If that happens, it will indeed be the lowest level since 2012-2013.
Russia exports significant wheat production to North Africa, Central Asia and the Middle East. Of course, the Black Sea Grains Initiative has helped Ukraine to export 16.8 tons in 2022-2023, about 39% of the country’s wheat is transported by road to Eastern Europe instead of going through international routes. lang from the ports of Chornomorsk, Yuzhny and Odesa. According to the USDA, Ukraine’s markets have shifted significantly to Europe, largely due to easy deliveries. Previously, Ukraine’s main wheat export markets were North Africa and Asia.
Increase exports of Russia and the world
Massive wheat supplies from Russia help lower global wheat prices. Wheat from Russia is currently being exported at approximately $235/ton. A few months ago the price was $275. If one tries to compare current prices with recent past prices, one will notice a significant drop in prices, with prices as low as $310 six months ago and around $375 a year ago. For countries like India, relatively low wheat prices seem like good news.
READ C: NG: What prompted Türkiye to accept Sweden’s entry into NATO?
Categories: Trends
Source: HIS Education