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War In Ukraine Impacting Global Wheat Prices

The Russian invasion of Ukraine began on the 24th of February 2022 and the war between the two led to disruptions in the supply chain. Both Russia and Ukraine are the major producers and exporters of Wheat in the global market accounting for around 20% and 10% of global wheat exports respectively. They play a crucial role in satisfying the wheat needs of people around the world especially of the people located in north African as well as Middle Eastern countries.

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War In Ukraine Impacting Global Wheat Prices

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  1. War In Ukraine Impacting Global Wheat Prices, Renewal Of Black Sea Grain Deal In March Unclear The Russian invasion of Ukraine began on the 24th of February 2022 and the war between the two led to disruptions in the supply chain. Both Russia and Ukraine are the major producers and exporters of Wheat in the global market accounting for around 20% and 10% of global wheat exports respectively. They play a crucial role in satisfying the wheat needs of people around the world especially of the people located in north African as well as Middle Eastern countries. The Russia-Ukraine conflict had a direct impact on the production as well as export of agro- commodities. This has led to the blockage of Ukraine’s key ports and lower export of grains out of the nation. As a result, the world witnessed a severe grain shortage leading to a surge in prices of several agro- commodities including wheat. Adding to the woes, other major wheat producers and exporters adopted a food protectionism approach and this ultimately led to a shortage of food and agro commodities including wheat around the world. Such was the severity of the crisis, that the United Nation along with Turkey brokered a deal between the two to avert global grain shortage.

  2. Black Sea Grain Deal On the 22nd of July, 2022, the UN brokered an initiative for the safe passage of grains through the Black Sea region for four months. The deal was signed between Russia and Ukraine for the resumption of export of goods from the three key ports of Ukraine. The Black Sea Grain Deal especially permitted Ukraine to ship out grains to the world through the ports of Odesa, Yuzhny, and Chornomorsk. In addition, the Secretary-General of the UN, Hon’ble António Guterres, declared the establishment of a Joint Coordination Centre (JCC) to oversee the implementation of the deal. It was set up in Istanbul and featured participants from Ukraine, Russia, and Turkey. The Black Sea Grain deal was renewed in November 2022 for four more months and currently, the deal has to be renewed again in March 2023. Wheat Export From Ukraine In 2023 Ukrainian Wheat Exports were valued at $5.1 billion in 2021, with the main destinations being Egypt, Turkey, Indonesia, Bangladesh, and Pakistan. Ukraine remained important this week for grain and oilseed markets, as Russia unleashed fresh missile strikes on the infrastructure of the country. This Monday, the Ukrainian agriculture ministry reported that Ukraine had exported 5.5 million tonnes of cereals, oilseeds, and other goods, a 1.3 million-ton decrease from December 2022. The negative export trend is driven by the deliberate obstruction of the grain route by Russian inspectors. The food commodity dropped just 0.3% from Monday’s closing of $8.0075 a bushel, which had been the highest since Nov. 23. Prices spiked on Friday after Russia unleashed its most powerful missile strike on Ukraine this year. Damage to infrastructure or escalation of the violence will impede exports, which are now operating approximately a third behind the prior season. This export rate has increased since the beginning of the season, as the Black Sea Grain Initiative boosts sea-based exports. The contract is scheduled to be renewed in mid-March, and its fate remains unknown. According to a news conference, the UN’s coordinator for the Black Sea Grain deal requested an adjournment in discussions with top government officials and diplomats last week. Conclusion The agreement, brokered by the UN and Turkey, was extended for an additional 120 days in November and is scheduled to be renewed again next month, but Russia has indicated that it is unhappy with certain facets of the agreement and has asked for sanctions impacting its agricultural exports to be lifted.

  3. Ukraine’s agricultural ministry stated in a statement that owing to a halt in assessments in the Bosphorus, a wait of 108 vessels formed on Feb 9. In order to reduce downtime and promote exports the threshold tonnage of boats might be increased to 25,000 tonnes for grains from 20,000 tonnes and to 10,000 tonnes for vegetable oils from 6,000 tonnes. If you are an importer wishing to buy agro-commodities including Wheat In Bulk or are an exporter willing to grow your agro-export business, then Tradologie.com is the right platform for you. Tradologie has 600,000+ verified global buyers and over 70,000 suppliers of food and agro commodities in its network and through the platform, you can connect and conduct trade with the relevant ones with ease. To register as a seller, Click Here. To register as a buyer, Click Here. To stay updated with the latest happenings of the agro-trade industry, follow Tradologie.com across all channels.

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