Ukraine wheat output, exports forecast to plummet

Ukraine’s wheat production is forecast to fall to its lowest level in 12 years and exports are expected to decline to an 11-year low, according to the latest projections from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.

The FAS sees production dropping to 17.5 million tonnes in the 2023-24 marketing year, an almost 50% drop from the record 33 million tonnes in 2021-22, the year prior to Russia’s invasion of Ukraine, a war that is now in its 16th month. Exports are forecast to fall to 10.5 million tonnes, down from the estimated 16 million in 2022-23 and below the record 18.8 million in 2021-22.

However, the projection for 2023-24 could be much lower if Russia opts out of the Black Sea Grain Initiative, which has allowed safe passage of grain exports from Ukraine since July 2022. A Ukrainian official recently told he is nearly certain Russia will not renew the deal when it expires in July, as it is developing an alternative for its ammonia exports.

The deal, which was brokered by the United Nations and Turkey, is credited with settling grain commodity markets. Ukraine also has been exporting grain via its small Danube River ports as well as through its western border with the European Union.

Russia has threatened not to extend the agreement beyond July 18 unless a series of demands, including the removal of obstacles to Russian grain and fertilizer exports, are met. The Black Sea export deal also allows for the safe export of Russian ammonia, which is used in nitrate fertilizer, but none has been shipped under the initiative.

Tags: exports, estimate, Production, wheat, projections, forecast, deal, ammonia, Black Sea Grain Initiative, Ukraine, Russia