Five facts about grain and the war in Ukraine

What happened to the grain business?

In a Turkish-brokered deal, Russia and Ukraine agreed to a deal that saw Ukraine export its grain across the Black Sea. The agreement allowed the ships to travel without being attacked on specific routes from Ukraine to the Bosphorus.

At the weekend, Russia said it would suspend participation because Ukraine and the UK had allegedly attacked Russia’s Black Sea fleet with drones. Moscow said the strikes affected civilian ships in the grain corridors, as well as a minesweeper vessel.

Both Ukraine and the UK have rejected the allegations and say Russia staged the attack. Despite Moscow withdrawing from the agreement, bulk carriers will continue to use the corridors. Whether Russia will let them through remains unclear.

What role does Ukraine play in global food security?

Ukraine is one of the world’s largest grain producers. The country mainly grows and exports wheat, corn and barley. According to the European Commission, Ukraine accounts for 10% of the world wheat market, 15% of the corn market and 13% of the barley market. With over 50% of world trade, it is also the main player in the sunflower oil market.

Ranked first and second respectively, corn and wheat are also the most cultivated cereals in the world. The departure of a major exporter like Ukraine could have serious consequences for global food security.

Who are the biggest producers of wheat, corn and barley?

According to statistics from the US Department of Agriculture, Ukraine was the world’s seventh largest producer of wheat in 2021/22 with 33 million tons. Only Australia, the United States, Russia, India and China produced more – with the EU actually ranking first if you count the union’s member states together.

Ukraine ranks sixth in the corn market. From mid-2021 to mid-2022, only Argentina, the EU, Brazil, China and especially the US grew more maize. Most barley is grown in the EU, followed by Australia, Russia and Ukraine.

Who primarily imports these grains?

The top importers of wheat in 2020, according to the Observatory of Economic Complexity (OEC), an international trade data visualization website, were Egypt ($5.2 billion), China ($3.47 billion) , Turkey ($2.44 billion), Nigeria ($2.15 billion) and Indonesia ($2.08 billion). Egypt was also the biggest buyer of wheat specifically from Ukraine, statistics show.

When it comes to corn, the most recent OEC figures available are for 2018, with top importers Mexico ($3.14 billion), Japan ($2.94 billion), South Korea ($1.92 billion), Vietnam ($1.85 billion) and Spain ($1.72 billion). . The main buyers of corn from Ukraine include the Netherlands, Spain and China.

Top barley importing countries in 2020 included China ($1.77 billion), Saudi Arabia ($1.38 billion), Netherlands ($512 million), Belgium ($369 million) and Germany ($369 million). 307 million). China was the biggest buyer of Ukrainian barley.

How does Russia’s war in Ukraine affect the global grain market?

Grain deliveries were initially suspended as a result of Russia’s blockade of Ukrainian ports, fueling fears of worldwide shortages and price increases. In mid-May, wheat and corn export prices soared to unprecedented levels. This had far-reaching consequences, particularly in Africa, the Middle East and Asia, according to the UN, – countries where the coronavirus pandemic and its aftermath had already exacerbated the food situation.

Meanwhile, pressure on the grain market has eased somewhat. The Food and Agriculture Organization of the United Nations (FAO) estimates that, despite the war in Ukraine, the global grain harvest in 2022 is likely to be only marginally smaller than in 2021. It remains to be seen whether the suspension of the grain export agreement by the Russia will affect the global market.

What did the agreement between Ukraine and Russia mean for exports?

As part of the deal reached in Turkey, the 20-25 million tonnes of grain currently blocked in Ukraine could finally be exported. Russian grain and fertilizer exports – restricted as a result of sanctions against Russia – were also facilitated.

The agreement also provided for safe corridors on the Black Sea between Ukraine and the Bosphorus; ships in the area and ports involved would not be attacked. A control center in Istanbul, headed by the United Nations and made up of representatives from Russia, Ukraine and Turkey, was supposed to monitor grain exports.

The agreement between Ukraine and Russia was important for global food security. Grains remain urgently needed on the world market, especially in Asia and Africa. In the wake of Russia’s war of aggression in Ukraine, the United Nations has warned of the biggest food crisis in decades.

This article has been translated from written in German. It was originally published on July 27th and updated on November 1st to reflect Russia’s withdrawal from the grain deal.