Russia is reaching the position of the world’s leading wheat exporter. At the same time, Ukraine is facing challenges that could lead to a significant decline in the country’s wheat exports. According to predictions, Ukraine’s wheat exports will fall by more than half from their previous peak and wheat output will hit its lowest level in 11 years.
The US Department of Agriculture (USDA) estimates a record Russian wheat export of 45.5 million metric tons (mt) in 2022-2023 (July-June cycle). In the previous three market years, Russia’s wheat export records were 33 tons, 39.1 tons and 34.5 tons. With such growth over the past year, Russia has surpassed the European Union’s record of 39.8 million tons in 2019-2020.
Additionally, Russian wheat exports are expected to reach a new high of 47.5 million tons in 2023-2024. If this new high is reached, it will be a record that surpasses those of the European Union, Australia, Argentina and Canada. This growth of Russian exports causes damage to Ukraine.
Ukraine’s wheat exports decreased from 21 tons in 2019-2020 to 16.8 tons in 2022-2023. Not to be missed, Ukraine’s record wheat exports are forecast to further decline to 10.5 million tons in the upcoming marketing year. USDA estimates that domestic production could also fall to 17.5 million tons. In case this happens, this will actually be the lowest record since 2012-2013.
Russia exports significant wheat output to North Africa, Central Asia and the Middle East. Certainly, the Black Sea Grains Initiative has supported Ukraine to export 16.8 million tons in 2022-2023, about 39% of the country’s wheat going via land routes to Eastern Europe, instead of via shipping routes. lang from the ports of Chornomorsk, Yuzhny, and Odesa. According to the USDA, the Ukrainian market has shifted significantly to Europe, mainly due to ease of transportation. Previously, Ukraine’s main wheat export markets were North Africa and Asia.
Increase in Russian and world exports
Huge wheat supplies from Russia have supported a decline in wheat prices globally. Wheat from Russia is currently being exported at approximately $235/ton. Months ago, the price was $275. If one tries to compare current prices with prices in the recent past, one will see that prices have dropped significantly, with prices as high as $310 six months ago and around $375 a year ago. For countries like India, relatively low wheat prices can be seen as good news.
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Source: pagasa.edu.vn