Ukrainian agricultural exports – What are the issues in light of the invasion?

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introduction

Ukraine is one of the world’s leading exporters of cereals as well as vegetable oils. The main agricultural products exported are maize and wheat. In 2021, Ukraine was the second largest supplier of cereals to the European Union (EU) and a major food supplier for low- and middle-income countries in Asia and Africa. The longer the Russian-Ukrainian conflict lasts, the more it risks creating food insecurity not only for Ukraine and the region, but also for the whole world.

Main agricultural products exported from Ukraine

For 2021, S&P Global Market Intelligence’s GTAS forecast estimates Ukrainian corn exports at 27.2 million metric tons and wheat exports are estimated at 21.2 million metric tons. These two account for 12.8% and 10.5% of total world exports respectively.

In addition to maize and wheat, which certainly play the major role here, among the top ten exported goods, the following foodstuffs can also be mentioned: “Animal and vegetable oils, excluding soybean oil”, ” Sunflower, rapeseed and colza seeds” as well as “Other grains and cereals, including rye, barley and oats”.

Ukrainian exports, 2021

IHS Markit, GTAS forecast

Ukrainian grain exports by destination

Ukraine is sometimes called “the breadbasket of Europe”. Its grain exports to the EU increased from 682,000 tonnes in 2010 to 15.9 million tonnes in 2019, mainly supported by maize exports which increased from 533,000 tonnes to 14.3 million tonnes. In terms of value, in 2019, Ukrainian grain exports to the EU increased by 23.9% year on year, reaching more than 3 billion dollars, then exports fell by 36.8% in 2020, for recover by 34.1% in 2021, reaching USD 2.6. billion.

Ukrainian exports to the EU

IHS Markit, GTAS forecast

In 2021, according to GTAS Forecasting estimates, Ukraine was the second largest supplier of cereals (including “maize”, “wheat” and “other cereals, including rye, barley and oats” ) for the European Union, representing 14% of total EU cereals. volume imports.

EU cereal imports, 2021

S&P Global Market Intelligence Forecast GTAS

Ukraine is also a major food supplier for low- and middle-income countries. According to estimates by S&P Global Market Intelligence GTAS Forecasting, in 2021, 55.1% of Ukrainian wheat was exported to Asia and 40.7% to African countries.

Ukrainian wheat exports, 2021

IHS Markit, GTAS forecast

The biggest importers of Ukrainian wheat in 2021 were Egypt, Indonesia, Bangladesh, Turkey and Yemen. Most of these countries are heavily dependent on Ukrainian wheat supplies, mainly those located in North Africa (Egypt, Libya) and West Asia (such as Lebanon and Yemen). For Indonesia and Bangladesh, Ukraine is also the second largest supplier of wheat.

leading Ukrainian wheat exporters, 2021

S&P Global Market Intelligence Forecast GTAS

The longer the Russian-Ukrainian conflict lasts, the more it risks creating food insecurity not only for Ukraine and the region, but also for the whole world. Wheat and maize prices already skyrocketed before the war, but due to the conflict we can expect prices to rise again, which will have strong implications for Africa’s poorer economies.

Ukraine, the world’s largest exporter of sunflower oil and seeds

Ukraine is the world’s largest exporter of sunflower oil (HS code – 1512 Oil from sunflower, safflower or cotton seeds, and their fractions, whether refined or not, but not chemically modified) with a share of 40% of the value of world exports during the year 2021.

sunflower oil exports

IHS Markit, World Trade Atlas

The main recipients of sunflower oil from Ukraine are India, China (continent), the Netherlands, Spain and Italy. With sunflower oil imports halted due to the Ukraine-Russia conflict, India must seek to substitute other edible oils or source cooking oils from other countries to maintain the domestic supply and prevent retail prices from rising rapidly.

Top 5 Sunflower Oil Importers, Ukraine

IHS Markit, World Trade Atlas

The largest markets for edible oil are India and China (continent). Over 80% of India’s sunflower oil demand was supplied by Ukraine in 2021. It seems obvious to predict that the dispute will lead to huge supply chain disruptions and already high sunflower oil prices. edible oil in India could increase further.

Consequences

Most Ukrainian exports pass through the Black Sea and Sea of ​​Azov ports – Odessa, Pivdeny, Chornomorsk, Kherson, Mariupol and Berdyansk. On February 24, when the Russian invasion started, most of the seaports were closed, so the operation of the ports was already disrupted, with no ships allowed to enter or leave the ports.

The head of the Ukrainian maritime administration confirmed on February 28 that Ukrainian ports will remain closed until the end of the Russian invasion, adding that the port of Mariupol suffered damage from Russian shelling. In addition, several shipping companies have suspended crossings to threatened Black Sea ports. Additionally, at least three commercial vessels have been hit by bombs since February 24.

For a number of countries in South Asia, West Asia and Africa, the reduction in the main source of supply of wheat, maize and vegetable oils will certainly increase food insecurity and could even lead to an increase in World hunger.

The conflict will also lead to supply chain disruptions and higher prices for agricultural products like edible oils in South Asia and other regions.

At the last USDA Agricultural Outlook Forum, US Trade Representative Katherine Tai described the Russian-Ukrainian conflict as the next potential shock to global trade and supply chains. She highlighted Ukraine’s position in the global agricultural market and said that we may soon see the economic impacts of the situation. It is still too early to assess the long-term consequences of the conflict, but a number of agencies will be working to assess the impact on agricultural trade as well as the broader global economy.

*Methodological note: All data for 2021 provided in this article sourced from the GTAS Forecasting database are still estimates (the fourth quarter of 2021 is estimated, with the first three quarters already covered by actual data), as all countries have not reported their full 2021 trade data.

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Editor’s note: The summary bullet points for this article were chosen by the Seeking Alpha editors.