War to cut Ukraine and Russia wheat exports by 12%
The Russian invasion of Ukraine will slash wheat exports from the countries by a combined 12%, said the Agriculture Department on Wednesday in an initial assessment of the short-term impact of the war. Nations from Europe to Asia and Africa will import somewhat less wheat in coming months in the face of higher prices and reduced supplies from the Black Sea region, it said.
Russia and Ukraine are ordinarily among the largest wheat exporting nations. USDA analysts said exports from the two countries would fall to a combined 52 million tonnes this marketing year, down by 7 million tonnes from their estimate before the invasion. The reduction would be partially offset by Australia and India, which have ample supplies to sell. U.S. wheat sales have been weaker than expected and would be nearly one-fifth smaller than last year, said the USDA.
“Exports are lowered for Ukraine by 4.0 million tonnes to 20.0 million, as the conflict in that country is expected to disrupt exports from the Black Sea region,” said the USDA’s monthly WASDE report. “Russia exports are reduced 3.0 million tonnes to 32.0 million tonnes as vessel transportation is expected to be constrained by the conflict and the imposition of economic sanctions.”
The impact would be felt in countries including Turkey, Egypt, Afghanistan, Algeria, Kenya, Pakistan, Tanzania, Yemen, and members of the EU, said the USDA report.
Abundant rainfall throughout the growing season boosted the Australian wheat harvest to a record 36.3 million tonnes. Aided by competitive prices, the bumper crop will allow Australia to export 27.5 million tonnes of wheat, its highest total ever, said the USDA. “India’s robust export pace is expected to continue because of its ample stocks and rising global prices.”
The USDA raised its forecast of wheat exports from Australia by 2 million tonnes and from India by 1.5 million tonnes from last month.
Expectations of continued high cash and futures prices indicate a season-average price of $7.50 a bushel, the highest in nine years, for the 2021 U.S. wheat crop, now on the market. A “significant majority” of the crop has been sold already, said the USDA.