Situation around Ukraine may affect wheat markets, says FAO expert

Tensions in relations between Ukraine and Russia may affect the wheat markets, given that the two countries are major producers, Monika Tothova, Economist with FAO, told TASS on Sunday.

“Given the importance of both Russia and Ukraine on the world cereal markets, the situation around Russian-Ukrainian border has an impact on the wheat markets. However, since there are many factors (many of which are quite volatile and changing often) affecting markets, specifying the exact extend of the impact of the tensions is not possible, but the current situation is contributing additional uncertainty to the markets,” the expert said.

“The actual impact of the tensions will depend on how long the tensions will last and how they will develop. If there is a deterioration in the overall situation with a significant impact on production, export logistics, etc, the impact on the global wheat markets will be sizeable,” Monika Tothova stressed.

She specified that in the coming few weeks, the Food and Agriculture Organization would make its first production forecasts for 2022 harvests. “Among other parameters, these will be based on planted area, crop conditions, availability of inputs, precipitation, etc, and include also eventual impacts of other factors, including geo-political, socio-economic, etc,” the expert said.

She reiterated that Russia supplies about 20% of world wheat exports, and Ukraine – about 10% “Russia produces on average about 10% of total world wheat production, Ukraine about three percent,” she added. “Cereal exports – wheat including – are seasonal, and the biggest volumes are exported soon after harvest, with export levels gradually declining as the marketing year progresses. At this point in time, export availabilities in both countries are relatively low,” the expert concluded.

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Tags: export, markets, Production, wheat, FAO, tensions, Ukraine, Russia