In July, grain exports from Ukrainian ports finally resumed and, at least for the time being, continue. The export of grain cargoes to the world was long awaited in many places, because Ukraine, known as the “bread granary” of Europe, feeds not only Europeans, but also people in the Middle East, Asia and Africa. However, Ukraine is not the only one that can fulfill this task. What is the world grain market and how much of it does Ukraine occupy?
In the 2020-2021 season, the largest grain growers were the USA, China, the European Union and India. Ukraine does not enter the top five, however, in terms of exports, it was the fourth largest grain exporter in the world. Last year, it kept 25% of the grown amount for itself, and exported the rest. Russia ranked third. Together, the two countries accounted for one-fifth of world exports. In the case of Ukrainian grain, the largest buyers were countries such as Egypt, Bangladesh and Yemen. But Ukraine also exported eight million tons of corn and another eight million tons of other agricultural products to countries like China and the European Union.
On the other hand, if we talk only about wheat, then in 2020 the largest wheat growers were Russia, China and India. On the other hand, in terms of exports, in 2020-2021, Russia and Ukraine together exported 28% of wheat from the total world wheat export – 8% for Ukraine, and 20% for Russia. Another 15% was exported by the European Union, followed by Canada, the United States and Australia. Maximo Torero, Chief Economist of the UN Food and Agriculture Organization, explains the importance of Ukraine and Russia in the market.
Ukraine’s agricultural sector is an important source of grain for world markets, especially in the Middle East and Africa, where the food security situation is particularly tense. Ukraine, also known as the “breadbasket” of Europe, is one of the main grain-growing regions in the world. Ukraine is an important exporter of wheat, barley, corn and other grains, and provides about half of all sunflower oil on global markets.
Russia’s blockade and shelling of Ukrainian ports, preventing grain exports, put millions at risk of starvation, and continues to do so, although exports from Ukrainian ports have picked up. Food prices have also risen due to Russia’s actions. The problem was outlined earlier this summer by David Beazley, executive director of the UN’s World Food Programme.
It is expected that in 2022-2023, the total production of grain in the world will decrease by 40 million tons, reaching 2.2 billion tons. This was announced by the International Grains Council at a meeting in June this year. On the other hand, consumption is only slightly lower, so global end-of-season stocks are expected to decrease.
The Russian army’s shelling of grain warehouses, shelling of grain fields… All of this is done purposefully to reduce Ukraine’s ability to feed itself and others. The President of Ukraine, Volodymyr Zelenskyi, has admitted that Ukraine’s grain harvest could decrease by about half this year. On the other hand, the Prime Minister of Ukraine, Denis Shmyhals, said that the harvest of grain and oilseeds this year will reach 65-70 million tons, which is approximately 70% of the 2020-2021 harvest. Meanwhile, Russia’s grain harvest could reach 126 million tons in the 2022-2023 season, while last year Russia grew about 113 million tons. Russia has already suspended the export of cereals to its allied countries, for example in Central Asia. And it is reported that the quality of Russia’s winter wheat crop, which accounts for almost three-quarters of the country’s annual output, has declined. This is due to the recent rains in several regions.
At the same time, it is clear that in Ukraine it is not only about feeding people at home and outside the borders. Export of crops is also a source of income. Even before the resumption of grain exports this summer, the Prime Minister admitted that the issue of unblocking sea ports is a billion-dollar problem for the Ukrainian economy.
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