NORMAL, ILLINOIS – The corn and sunflower planting season has come for Ukrainian farmers, causing many other problems and uncertainties that are spreading around the world as Russia continues to invade.
Ukraine, the size of Texas, has about 30% of the world’s fertile chernozems and plays an important role in the global export market for corn, sunflower seeds, oil and wheat. Ukraine has 81.3 million hectares of arable land, which is 57% of its total area.
Julia Tetech, a native of Ukraine and an associate professor of agribusiness at Illinois State University, gave her personal insight into the impact of the war at a recent webinar organized by the Illinois Corn Growing Association.
Aunt grew up in Ukraine and worked on the farm of her grandparents to grow wheat and potatoes in that country.
“My parents, my sister and her family are still there, as well as many of my friends who stayed after we graduated from university and work there in the agricultural business. It is definitely very close to the heart and very difficult, ”she said.
“Agriculture is Ukraine’s largest export industry, accounting for 9.3% of gross domestic product. That is why agriculture is so important for Ukraine’s economy, as well as for food security around the world. “
Ukraine produces 32.7% of the world’s sunflower, which is 50.2% of world exports of seeds and oils, making it the largest exporter of this product in the world.
It produces 3% of world corn production and accounts for 14.5% of world corn exports, making it the fourth largest exporter of corn.
“I have a heavy heart, but I keep hope.”
– Julia Tetet, associate professor of agribusiness at the University of Illinois
Ukraine produces 3.7% of the world’s wheat production, but accounts for 9.5% of world wheat exports, making it the world’s fifth-largest wheat exporter.
“All that has been said, he is small but powerful. It is a small country, but quite relevant in the world grain market, ”Tete said.
About 80% of Ukraine’s cargo is transported by rail from 12,427 miles of railroad tracks to move grain. Also has two ports in southern Ukraine.
“We transport about 95% of the grain through these ports to North Africa and the Middle East. This remains a key area for Ukrainians, in particular because of the importance of this infrastructure for agriculture, ”Tete said.
Many countries depend on Ukrainian agricultural products, just as Ukrainian farmers depend on this demand to maintain prices
India and China account for 31% and 20% of total exports of sunflower and oil from Ukraine, respectively.
China receives 28% of total Ukrainian corn exports, followed by the Netherlands – 11%, Egypt – 10%, Spain – 9% and Turkey – 5%.
Egypt with 27% of Ukrainian exports, Indonesia with 12% and Pakistan with 11% are the leading destinations for Ukrainian wheat exports.
“If Ukraine is unable to serve these markets and they go somewhere else, they will have to rebuild these relations. Then the question arises as to how much these buyers depend on Ukraine, because they not only export from Ukraine, but also from other countries, ”Tete said.
In the corn market, China buys about 51% of its imported corn from Ukraine and 44% from the United States.
The Netherlands buys 45% of total corn imports from Ukraine and 20% of French corn imports from Ukraine. Egypt buys 27% of total corn imports from Ukraine, and 30% of Spanish corn imports – from Ukraine.
“These countries depend on Ukraine, and the question is where they are going to redirect their purchases,” said Tete.
For sunflower and oil seeds, 76% of India’s total imports come from Ukraine, as well as 88% to Iraq, 81% to the Netherlands, 71% to Spain and 61% to China.
In addition, China imports 35% from Russia and India imports 17% from Russia.
“If Russia is unable to export sunflower seeds to these countries due to sanctions and supply chain problems, it will also be a problem. In North America, sunflower oil may not be such a big problem, but it is the main type of oil that people use for cooking and consumption in the Middle East and Asia, ”said Tete.
Lebanon buys 61% of wheat in Ukraine. Pakistan buys 49% of wheat imports from Ukraine and 38% from Russia.
Egypt receives 24% of wheat imports from Ukraine and 62% from Russia. Indonesia produces 26% of its wheat from Ukraine.
Bangladesh receives 31% of wheat imports from Russia and 23% from Ukraine. Yemen buys 26% of wheat imports from Russia and 21% from Ukraine.
“Most of the countries that depend on wheat supplies from Ukraine are in the Middle East, South Asia and North Africa. The problem with this is that if you look at the level of poverty in the world, South Asia has a large number of levels of extreme poverty excluding India, ”Tetech said.
“The poverty rate in South Asia is about 26% and 21% in the developing world as a whole. Many of these countries would fall into this list. These are the countries that are already struggling with food security, and this is in addition to the limited supplies and higher prices they will have to deal with. ”
The countries that get most of their wheat from Ukraine and Russia are Somalia, Benin, Egypt, Sudan, the Democratic Republic of the Congo, Senegal and Tanzania.
“These countries are heavily dependent on Ukraine and Russia for wheat, but we don’t necessarily sell them as much of our exports in volume. We can sell 1% of our exports to Somalia, but in Somalia it is about 80% of all the wheat they buy worldwide, ”Tete said.
“Again, the common denominator is that all of these countries in North Africa, North Africa and the Middle East are already struggling with poverty, and so this will be another difficulty they will have to overcome to find other sources or markets to find an alternative ”.
Currently, Ukraine stores a lot of grain. The concern is this year’s production and long-term consequences.
“We have estimated that they have been consuming grain for about two years, with 234 million bushels of wheat and 585 million bushels of corn available for export,” Tete said.
“As a rule, during this period we send about 1.5 billion dollars for the export of fire per month. That’s about 195 million bushels of grain a month. However, only 19.5 million bushels were exported in March. So we lost 90% of that $ 1.5 billion in March because of the war because the export routes were blocked. ”
Lack of exports
With less Ukrainian wheat available to vulnerable food security markets, other countries have the potential to fill these gaps.
“India and Australia are the two countries we are now looking to help with wheat. India contains about three times the amount of wheat they need each year. With large reserves in India, I hope they will be able to export some of this, ”Tetech said.
“Indian wheat is usually not competitive in the export market, so they consume it domestically, but in this case, they have the opportunity to do so. Australia can pick up several acres.
“The United States, Brazil and Argentina are countries that could help with the corn gap, but another issue is fertilizers. Russia and Belarus are the largest producers of fertilizers, and it remains unclear how producers will react to changes in the availability and prices of fertilizers, and how this will affect their decisions to plant corn and soybeans.
“Argentina and Romania could help with sunflower seeds and oil.”
“We believe that the war in Ukraine will affect world grain markets for at least the next two years, if not more. It really depends on a lot of things that are out of our control. Therefore, no matter how good a fashion designer or economist you are, it is very difficult to predict the outcome in this case, because you simply do not know how long the war will last, ”Tete said.
“We believe that the impact on global food security will depend on the ability and willingness of other grain producers and regions to close these gaps in these three commodities. Grain prices will remain high and volatile. “
The potential impact of the war on global food security – AgriNews
Source link The potential impact of the war on global food security – AgriNews