World Grain - April 2022 - 28

FEATURE: WAR THREATENS GRAIN TRADE, FOOD SECURITY
Russian economy, inflicted by the Western sanctions.
The Russian consultancy IKAR said there have been
almost no sales of Russian wheat to foreign customers
since the conflict commenced. Another consultancy,
SovEcon, said that no demand for Russian wheat
among non-Russian customers had been seen since
Feb. 24, the first day of the invasion. To some extent,
this might be associated with the problems in the Azov
Sea, where shipping was stopped on the first day of the
war, SovEcon added.
" The physical supply of commodities is not the only
concern for Black Sea trade, as ports remain closed and
logistical infrastructure in Ukraine is expected to be severely
damaged, " commented James Bolesworth, managing
director, CRM AgriCommodities. " Furthermore,
the sanctions placed on Russia by many countries and
indeed businesses will have long-lasting consequences
for global commodity trade, with a number of global
banks withdrawing trade finance from deals involving
Russian commodities. "
However, Elena Turina, director of the analytical
department of the Russian Grain Union, countered
that Russian grain exports should not be significantly
impacted by Western sanctions. She said the main importers
of Russian grain are located in Southeast Asia,
Africa, and Middle East countries - regions where
most countries have not introduced sanctions against
Russia.
" If we face sanctions (on grain exports) to the United
States and Europe, we can redistribute exports to other
needy countries, " Turina said.
But not all market participants are confident this
will be the case. A spokesperson for a Russian grain
company, under the condition of anonymity, told World
Grain that government officials are trying to reassure
the companies that once the conflict ends, everything
will return to normal.
" They say that the world market would not survive
without Russian wheat, " the source said. " But what
we see is an absence of demand. Whether it is temporary,
nobody can tell. There is a lot of uncertainty on
the table. "
Ukraine grain in jeopardy
There are major concerns about how the Ukraine grain
industry will perform this year, given that many farmers
fled the country, while some reportedly joined the
militia. Long-term prospects are every bit as murky.
Ukraine's wheat crop was nearly all planted in the
autumn and currently stands at 6.5 million hectares.
Spring wheat was planted through March and was forecast
to be around 175,000 hectares, bringing the total
wheat area to 6.7 million hectares, Lee estimated.
" If the situation on the ground escalated to a position
that farmers could not apply fertilizers or pesticides
and assuming they could harvest it in July, there would
still be a wheat crop, probably something like 16 million
to 17 million tonnes, " Lee said.
" This compares with 26 million to 27 million tonnes
we currently forecast if farmers are unencumbered to
manage their crops, " he said.
Ukraine requires 9 million to 10 million tonnes of
28
April 2022 / World Grain / World-Grain.com
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World Grain - April 2022

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