‘Europe’s bread stock’ Ukraine may export little or no wheat this year as war rages, experts fear

War-torn Ukraine could see most of its grain exports wiped out this year, adding to the financial pressure on British households and increasing the risk of a wage shortage. real elsewhere.

According to data from ING Bank and the US Department of Agriculture, kraine, known as Europe’s bread tray, will account for 12% of global wheat exports and nearly a fifth of global corn production this year. now on.

Now, commodity analysts and agricultural experts fear that both production and exports will be devastated by the Russian invasion. International wheat prices have risen to record highs.

Many of Ukraine’s agricultural workers have been redeployed to fight on the front lines, the roads and bridges needed to transport them to the farms have been destroyed, and little diesel to spare for farm vehicles. industry, the country’s crops faced a dire prospect.

The countries’ ports were closed when war broke out last month.

Harvests often vary from year to year, but economists and commodity experts are trying to figure out the impact of losing a large, if not all, of Ukraine’s wheat harvest. .

“The longer the conflicts drag on, the more significant the impact on crop yields and yields will be,” said Mike Lee, of agricultural consulting firm Green Square. The Independent.

Green Square forecasts crop yields in the Black Sea region, which includes Russia, Ukraine, Belarus, Romania and Moldova.

Mr. Lee made site visits near Ukraine’s border with Poland and interviewed Ukrainian farmers to assess grain production prospects in the region.

Even assuming a 50% production of Ukraine’s wheat – which may seem overly optimistic – leaves about 15 million tonnes of wheat post-harvest.

This means that there will be very little left for exports after accounting for about 10 million tonnes that normally reside in the country to supply the domestic population, according to Mr. Lee, and very little, if any, for export, according to Mr. Lee. export.

However, that also assumes that crops can be harvested. Some farmers said there were large shrapnel in the field, which could make it impossible to harvest using farm machinery.

Winter wheat has been grown on the country’s fertile black soil and will be harvested in July, although yields could be severely reduced due to lack of fertilizer.

Mr. Lee said that corn plants are usually sown in the spring, but only about 60% of the seed needed to grow maize (maize) has been delivered to farms.

“If the July wheat harvest continues, very little can be harvested,” he added.

Ukraine is generally expected to be the world’s fourth largest exporter of corn and 50% of the world’s sunflower oil.

Warren Patterson, head of commodity strategy at ING, in a note to clients.

He added: “Sunflower seeds face the same risks as maize in the 2022/23 season, with planting likely to be delayed and significantly lower.

The risk to Ukraine’s crops comes at a delicate time for the world economy due to the outbreak of the pandemic. Politicians in China, a major importer of Ukraine’s grain, have warned that the country faces a poor domestic winter wheat harvest, adding to concerns about supply.

Egypt, the world’s largest wheat importer, supplies about 80% of its food from Russia and Ukraine. Many other countries across north and east Africa are likely to be hit hard.

In the past 10 days, a number of countries have imposed restrictions on the export of certain grains and vegetable oils abroad, according to Simon Evenett, professor of international trade at St Gallen University.

These countries include Belarus, Russia, Ukraine, but also Lebanon, Egypt, Hungary, Serbia, Moldova, Algeria, Turkey and Indonesia, Professor Evenett said. Data on food export restrictions is being collected as part of St Gallen’s Global Trade Alert, which lists wave export restrictions applied to healthcare products in the UK. COVID-19 pandemic.

The global lender of last resort, the International Monetary Fund, warned on Monday that the economy could face a contraction of at least 10 per cent of GDP this year, but potentially up to 10 per cent of GDP. 35% if the Russian invasion is prolonged.

Agriculture accounts for about 12% of Ukraine’s economic output, according to data collated in the CIA World Factbook, behind services and industry at 60% and 28% respectively.