FNPS Society

Main Menu

  • Home
  • Amalgamation
  • Terms of trade
  • Monotonic
  • G-8
  • Financial Affairs

FNPS Society

Header Banner

FNPS Society

  • Home
  • Amalgamation
  • Terms of trade
  • Monotonic
  • G-8
  • Financial Affairs
Terms of trade
Home›Terms of trade›Ukraine, Russia and agricultural production – Ohio Ag Net

Ukraine, Russia and agricultural production – Ohio Ag Net

By Richard Lyons
March 2, 2022
9
0

By Nick Paulson, Joe Janzen, Krista Swanson and Gary Schnitkey, Department of Agricultural and Consumer Economics at the University of Illinois and Carl Zulauf, Department of Agricultural, Environmental and Development Economics, Ohio State University

Ukraine and Russia have become an important source of global supply of major agricultural products over the past 25 years. These countries, often referred to collectively with various other countries in Eastern Europe and Central Asia as the Black Sea region, play an important role in the production and export of major cereals (maize, wheat and barley ) and oilseeds (especially sunflower and sunflower). In addition to the direct consequences it will have on the inhabitants of the region, the Russian invasion of Ukraine raises many economic concerns, including the impact of the conflict on world agricultural markets.

Production and export share data provided are calculated from the USDA Foreign Agricultural Service Production, Supply, and Distribution Database (USDA-FAS PSD). Note that we have chosen to consider the members of the European Union (EU) as a single unit when considering production and export shares and comparing them with other countries.

Wheat

Russia and Ukraine account for 14% of global wheat production from 2017 to 2021 and rank first and fifth respectively. Both countries are major exporters, supplying almost 30% of world wheat exports. The EU, US and Canada are also major wheat producers and exporters. China and India are major wheat producers, but are net importers and supply relatively small shares of world wheat exports. Other countries with a fairly large share of wheat exports are Australia (8.4%), Argentina (6.6%), Kazakhstan (4.1%) and Turkey (3.4%). ).

But

The United States remains the main world producer (32%) and exporter (33%) of maize. Brazil (18.3%) and Argentina (20%) rank second and third in maize exports. Ukraine now ranks fourth, contributing more than 15% of world corn exports. Russia ranks sixth with a 2.3% share of maize exports. In particular, Ukraine has been China’s main corn supplier. A shift to importing more US corn into China began in 2020 following a poor Ukrainian harvest.

Growth in the share of global maize production and exports from the Black Sea region (Russia, Ukraine and Kazakhstan) has been substantial, rivaling that of increased production in China and both the production and exports from South America over the last twenty years. Maize production in India, Mexico and South Africa exceeds that of Russia, but accounts for a smaller share of global exports.

Barley

While the EU holds the dominant share of production and is the leading region for world barley exports, Russia and Ukraine account for around 19% of barley production and almost 32% of exports from barley. Australia, Canada and Argentina are the other major contributors to world barley production and exports.

Soy and vegetable oil

The global soybean market continues to be dominated by the United States and South America. More than 82% of the world’s soybean production and almost 90% of soybean exports come from the United States, Brazil and Argentina. Russia and Ukraine rank in the top 10 for soybean production and exports, but only account for 2.3% of global production and 2.1% of global exports.

However, Ukraine and Russia are the main producers and exporters of sunflower oil, which account for a production share of 9% and an export share of nearly 2% for the global vegetable oil market. Nearly 60% of global sunflower oil production occurs in Ukraine and Russia, and the two countries account for more than 75% of global exports.

Consequences

The broad economic implications of the Russian invasion of Ukraine and the resulting sanctions imposed on Russia by the international community could include disruption of trade flows, increased inflationary pressures and increased volatility across a wide range of global markets.

The invasion is likely to impact the spring planting season for Ukrainian farmers, the extent of which will depend on the duration and severity of the conflict. The diversion of trade flows will lead to price pressures and increased volatility in agricultural products for which Russia and Ukraine play a relatively large role in terms of world production and trade. This heightened volatility was seen in wheat and corn futures trading activity, which included limit (maximum) price movements up and down over several days.

The inability of Ukrainian and Russian agricultural products to reach world markets could result in higher prices that would not otherwise have occurred to the benefit of grain and oilseed producers in other major producing and exporting countries such as the United States. However, market disruptions resulting from the conflict and Russian sanctions will also have significant economic costs. Rising agricultural commodity prices will hurt net importers of agricultural products, especially in developing regions of the world.

Other costs of conflict may also affect US agriculture, including increased volatility that presents both opportunities and challenges from a risk management perspective. Higher prices for agricultural inputs would offset the benefits of higher corn, soybean and wheat prices for US farmers to an as yet unknown degree. Russia and its ally Belarus are the world’s main suppliers of energy and fertilizers that could be seriously affected by the sanctions. With energy and fertilizer prices and volatility already at elevated levels, the invasion of Ukraine creates additional uncertainty regarding input costs and availability that could further impact the 2022 crop year and also extend to future agricultural campaigns.

To learn more about the University of Illinois Farmdocdaily visit: farmdocdaily.illinois.edu.

Related posts:

  1. Who owns the information and who controls it?
  2. 2 Aldabra turtles return to the Seychelles from the French zoo
  3. Enterprise Information | Inventory market and inventory market information
  4. China’s commerce plan might trigger lasting injury
Tagssouth africaunited stateswide range

Categories

  • Amalgamation
  • Financial Affairs
  • G-8
  • Monotonic
  • Terms of trade
  • TERMS AND CONDITIONS
  • PRIVACY AND POLICY