How Russia has become world’s top wheat exporter at Ukraine’s expense
- July 14, 2023
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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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.