How Russia has become world’s top wheat exporter at Ukraine’s expense

Subject: Geography

Section :Economic geography

Context:

Russia is consolidating its position as the world’s top wheat exporter, even as Ukraine’s shipments are projected to more than halve from their peak and production plunge to a 11-year-low.

Global wheat export:

Russia’s wheat exports are expected to touch a new high of 47.5 mt in 2023-24, way ahead of the EU (38.5 mt), Canada (26.5 mt), Australia (25 mt) and Argentina (11 mt).
The US Department of Agriculture (USDA) has estimated Russia’s wheat exports at a record 45.5 million tonnes (mt) in 2022-23 (July-June), up from 33 mt, 39.1 mt and 34.5 mt in the preceding three marketing years.
It has left behind the European Union, which had exported 39.8 mt in 2019-20, before slipping to 29.7 mt, 32 mt and 34 mt in the following three years.
Ukraine’s exports fell from 21 mt in 2019-20 to 16.8 mt in 2022-23 and are forecast to further decline to 10.5 mt in 2023-24.

Primary destination of Russia’s wheat:

The primary destinations for Russian wheat are the Middle East, North Africa and Central Asia, led by Egypt, Iran and Algeria.
While the Black Sea Grain Initiative helped Ukraine export 16.8 mt in 2022-23, about 39% of its wheat actually moved via the land route to Eastern Europe, instead of the specially-created corridors for shipping from the three designated ports of Odesa, Chornomorsk and Yuzhny.

Global wheat prices:

Ample supplies from Russia have helped soften global wheat prices.
Russian wheat is now being exported at around $235 per tonne, as against $275 three months ago,$310 six months ago and $375 a year ago.

Implication for India:

The relatively low international prices of wheat can be a comfort factor for countries like India.
It might have to consider the option of wheat imports if the kharif rice crop does not turn out too good due to poor monsoon rain in major paddy-growing states.

About Black Sea Grain Initiative:

It was set up to resume vital food and fertilizer exports from Ukraine to the rest of the world.
It was brokered between Russia and Ukraine by the United Nations and Turkey.
The Initiative allowed exports of grain, other foodstuffs, and fertilizer, including ammonia, to resume through a safe maritime humanitarian corridor from three key Ukrainian ports: Chornomorsk, Odesa, and Yuzhny/Pivdennyi, to the rest of the world.