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Export stop due to the Ukraine war: Who instead of Russia and Ukraine now has to export wheat to fight hunger

2022-03-21T12:39:18.611Z


The breadbaskets of Russia and Ukraine are no longer exporting wheat for the time being. Which countries are particularly affected, where there is a risk of hunger and how Germany and India can help - an overview.


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Photo: Daniel Bockwoldt/ dpa

Russia stopped wheat exports until the end of June - the world's largest wheat exporter of all things.

There should only be exceptions for the Russian-dominated Eurasian Economic Union, which includes Belarus, Kazakhstan and Armenia.

Neighboring Ukraine is the world's fifth largest exporter and thus another important producer.

But wheat exports across the Black Sea have been slowed down by the war.

If Russia and Ukraine fail as wheat exporters in the long term, this can lead to massive problems in food production.

What is the importance of Russian and Ukrainian wheat for the world?

The most important questions and answers at a glance.

How much wheat comes from Russia and Ukraine?

According to the largest German agricultural trader Baywa, the Black Sea market with wheat from Russia and Ukraine covers around 30 percent of global demand.

The largest share comes from Russia.

The world's largest wheat exporter grows wheat on 29 million hectares.

For comparison: the entire European Union has around 24 million hectares available for this.

In recent years, the Russian wheat harvest has fluctuated between 75 and 85 million tons.

Almost half of this was exported.

According to this, around a fifth of all exports of wheat and wheat products come from Russia, as calculated by the US federal agency USDA Foreign Agricultural Service.

Ukraine accounts for a further 8.5 percent.

What are the consequences for Germany and the EU?

With the war in Ukraine, food and feed prices are rising drastically around the world.

The Food and Agriculture Organization (FAO) of the United Nations is predicting an increase of up to 20 percent.

In Germany, a

large part of the imported wheat is used as animal feed in cattle breeding

.

In the animal feed sector, there is therefore a risk of further

price increases

, which will then have an impact on food prices.

However, the food sector itself is not affected by Russia's export ban.

According to the Federal Minister of Food and Agriculture,

Cem Özdemir

(56), the EU and Germany have a

degree of self-sufficiency of more than 100 percent

- that is, they produce more than their own food industry needs.

Above all

, Germany, France and Romania are among the

wheat exporters

within the EU

.

Which countries depend on wheat imports?

However, the food shortage could become worse, especially in poorer countries and in crisis regions in Africa and Asia.

Because

more than half of the food that the World Food Program of the United Nations (WFP) distributes in crisis regions, according to its own information, comes from Russia and Ukraine

.

According to the UN, a loss of grain suppliers would above all jeopardize the food supply of many people in Africa.

Before the war, 45 African countries imported the grain, mostly from Ukraine and Russia, including Egypt and Tunisia

.

With more than 100 million inhabitants, Egypt is the most populous country in the Arab world.

But it is not only in African regions that the food shortage is threatening to worsen.

Turkey buys around 65 percent of its wheat from

Russia

.

A deterioration in relations could make imports more expensive here.

Lebanon

is already threatened with collapse.

The country has so far obtained 90 percent of its wheat imports from Ukraine.

Experts also see sensitive consequences in the food supply for many other countries such as Cameroon, Algeria, Libya, Ethiopia, Kenya and Mozambique.

The situation in

China

remains unclear for the time being.

Although the country produces more wheat than any other country in the world, it also has the highest demand and therefore has to import additional Russian grain.

China has already

lifted import restrictions on wheat from Russia

.

As the Beijing customs administration announced, wheat from all over Russia should be allowed to be imported into China in the future.

Previously, this was only possible from seven Russian growing regions, reported the newspaper "Global Times".

It is unclear whether China will be permanently affected by the export ban decided by Russia.

What is clear, however, is that wheat prices have already risen sharply in China.

"The price of domestic wheat is going up like crazy right now," a Chinese trader told Reuters.

What role do speculations and price jumps on the commodity markets play?

A big problem for many countries in Africa as well as for China is the sharply rising price.

The mere prospect of a shortage in the supply of export wheat has already led to sharp price jumps on the international commodity exchange in Chicago.

If commodities traders bet that prices will continue to rise, this has a self-reinforcing effect: This means that the price traded on the commodity exchanges does not necessarily have anything to do with the real supply of a commodity.

Even if the global supply of export wheat falls by just 10 percent, this can cause the price to rise by more than 20 percent: commodity prices have therefore decoupled from real supply.

This is tragic for poorer countries: people can no longer afford wheat even if

when there is actually enough.

They are then dependent on aid deliveries from international aid organizations.

Who steps in to avoid famine?

The consequences of the failure of Russia and Ukraine for the global grain trade and supply are far-reaching.

The world's other wheat exporters, such as the EU or the US, may be able to narrow the gap, but not close it.

The fear of a long-term shortage of wheat has already sparked speculation and caused the biggest price jump in 13 years: the wheat price is currently around 362 euros per ton.

For comparison: one day before the Russian troops invaded Ukraine - February 23, 2022 - a ton of wheat cost around 287 euros.

Agricultural experts expect that the

EU will now have to take over a large part of the falling Russian export demand

.

Romania, France and Germany are the largest grain exporters among EU countries.

But another wheat producer also wants to increase the export quota:

India

wants to take the turmoil on the global wheat market as an opportunity to increase exports and gain market share.

Despite overproduction, logistical difficulties and quality problems have so far slowed India's attempts to sell larger quantities of wheat on the world market.

Wheat harvest in India:

The country has catch-up potential in terms of exports

Photo: Raminder Pal Singh/ dpa

The Indian government now wants to change this.

Measures will be taken in the coming weeks to make the country one of the top exporters of higher quality wheat, two government officials told Reuters.

Among other things,

additional rail transport is to be provided and the export of wheat is to be given priority in ports

.

While exports are still mainly going through two ports on India's west coast, additional loading points are now to be set up on the east coast.

In addition, more than 200 laboratories are to monitor the quality of export wheat on behalf of the state.

India exported 6.1 million tons of wheat last year, 1.1 million more than the year before.

According to insiders, the measures could mean that

India's exports could rise to 10 million tons per year

.

Source: spiegel

All news articles on 2022-03-21

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