Russia is reaching the position of the top wheat exporter in the world. At the same time, Ukraine is facing challenges, that can lead to a significant decline in its shipment of wheat. As per projections, the wheat exports of Ukraine will be declining by more than half in comparison to their earlier peaks, and wheat production will be hitting an 11-year low.
The United States Department of Agriculture (USDA) estimated the wheat export record of Russia for 45.5 million tonnes (mt) in the year 2022-2023 (July to June cycle). In the preceding three market years, Russia's wheat export record was 33 mt, 39.1 mt, and 34.5 mt. With such growth in the recent year, Russia has surpassed the record of the European Union, which held a record of 39.8 mt in the year 2019- 2020.
Additionally, the wheat exports of Russia are expected to hit a new high of 47.5 mt in the year 2023-2024. If this new high gets touched, it would be a record that would surpass the records of the European Union, Australia, Argentina, and Canada. This growth of Russia's exports is at the expense of Ukraine.
The wheat exports of Ukraine declined from 21 mt in the year 2019-2020 to 16.8 mt in the year 2022-2023. Not to miss, the wheat export records of Ukraine are forecasted to further decrease to 10.5 mt in the upcoming marketing year. The USDA has estimated that the production in the country may also decline to 17.5 mt. In case this happens, it would actually be the lowest record since the year 2012-2013.
Russia exports its wheat production significantly in North Africa, Central Asia, and the Middle East. Sure, the Black Sea Grain Initiative has aided Ukraine in the export of 16.8 mt in the year 2022-2023, around 39 percent of its wheat traveled through the land route to Eastern Europe, rather than through the corridors from the ports of Chornomorsk, Yuzhny, and Odesa. The markets of Ukraine have shifted significantly to Europe, majorly due to the shipment ease, as per the USDA. Earlier, the main markets for Ukraine's wheat export were North Africa and Asia.
The increase in Russian exports and the world
Huge wheat supplies from Russia have aided in easing the wheat price globally. The wheat from Russia is currently being exported at approximately a price of $235 per tonne. Months ago, the price was $275. If one attempts to compare the present price to the ones in the recent past, one would find a significant softening of the prices, with the price being as high as $310 six months ago, and approximately $375 a year ago. For countries like India, the relatively low prices of wheat can sound like a piece of good news.
ALSO READ: What made Turkey give approval for Sweden's accession into NATO?
Comments
All Comments (0)
Join the conversation