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How Will Ukraine Impact Global Agriculture? - 11th March 2014

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Tuesday 11th March 2014.
Sarah Mikesell - TheCropSite Senior Editor

Sarah Mikesell
Senior Editor



How Will Ukraine Impact Global Agriculture?

Greetings ~ as the situation in Russia and the Ukraine escalates, I’ve been watching my Twitter feed throughout the day for news concerning the people and politics, but also agriculture.

In the US, I suspect the recent support in commodity prices was our short term consequence, and Monday’s USDA’s reports have already turned back some of those gains. However, a prolonged conflict which could disrupt Russia and Ukraine’s exports could have several fall-outs, one of which is pushing the price of staple foods higher around the globe.

USDA forecasts that Ukraine will export 10 million tonnes of wheat in 2013-14, making Ukraine the fifth largest exporter of wheat.

Ukraine is the world’s third largest corn exporter, trailing the US and Brazil. Production rapidly rose from 3.85 million tonnes and almost no exports in 2000 to a comparatively huge crop of 30.9 million tonnes and 18.5 million tonnes of exports this year, or 16 percent of global exports.

Combined, USDA projects that 10.4 per cent of global wheat production and 16.7 per cent of wheat exports will come from the Russia and Ukraine. Both are also important producers of all course grains, including corn, rye, sorghum and barley, which account for 18.3 per cent of global exports.

"Events in Ukraine will have a direct impact on US farmers in the international marketplace," said Tom Sleight, US Grains Council president.

Ukraine reported a record corn harvest in the 2013/2014 marketing year of more than 30.9 million metric tons (1.2 billion bushels). The USDA projected in February that exports for the year will reach 18.5 million tons (728 million bushels).

Cary Sifferath, USGC regional director for the Middle East and Africa, estimates that approximately 15 million tons (591 million bushels) of this total has already been shipped, leaving approximately 3.5 million tons (138 million bushels) in projected exports between now and June. How this will be affected by the current turmoil is uncertain.

"Ports are open and vessels are loading but shipments are becoming increasingly difficult," Sifferath said. "We're seeing farmers holding grain to hedge against a devaluing currency."

Ukraine's winter wheat and barley were planted before the onset of the crisis, but corn planting is due to start in the next 30 to 45 days, and credit availability may become an issue.

"The economic instability will affect Ukrainian farmers looking to plant this year's crop," Sleight said. "Ukraine is in a tough spot financially, and planting season is just around the corner."

Many questions will go unanswered for the time being. Will Ukrainian farmers have access to credit in order to plant? How much land will farmers be able to plant? Will Europe help Ukraine through their financial crisis?

For more on the Ukraine’s spring planting, click here.

Have a great week!


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