Five facts about grain and the war in Ukraine

Workers unload wheat at grain silos in Banha, Qalyubia governorate, Egypt, May 25, 2022. Egypt, the world’s largest wheat importer, has been forced by war in Ukraine to change radically of strategy and now relies on the cereal harvest as a means of reducing its dependence on the outside for the years to come vis-à-vis this vital product in the most populous Arab country. Khaled Elfiqi, EPA-EFE/Dossier

What happened with the grain deal?

In a Turkish-brokered deal, Russia and Ukraine had agreed to a deal under which Ukraine exported its grain via the Black Sea. The agreement allowed ships to travel unattacked on specific routes from Ukraine to the Bosphorus.

This weekend, Russia announced that it would suspend its participation because Ukraine and the United Kingdom allegedly attacked the Russian Black Sea Fleet with drones. Moscow said the attacks hit civilian ships in the grain corridors as well as a minesweeper vessel.

Both Ukraine and the UK have denied the allegations and said Russia staged the attack. Despite Moscow’s withdrawal from the agreement, grain vessels must continue to use the corridors. Whether Russia lets them pass is not yet clear.

What role does Ukraine play in global food security?

Ukraine is one of the world’s leading grain producers. The country mainly grows and exports wheat, corn and barley. According to the European Commission, Ukraine accounts for 10% of the world wheat market, 15% of the corn market and 13% of the barley market. With more than 50% of world trade, it is also the main player in the sunflower oil market.

Ranked first and second respectively, corn and wheat are also the most widely grown cereals in the world. The abandonment of a major exporter like Ukraine can have serious consequences for global food security.

Who are the biggest producers of wheat, corn and barley?

According to statistics from the United States Department of Agriculture, Ukraine was the world’s seventh largest producer of wheat in 2021/22 with 33 million tons. Only Australia, the United States, Russia, India and China produced more – with the EU actually ranking first if you count the member states of the union together.

Ukraine ranks sixth in the corn market. From mid-2021 to mid-2022, only Argentina, the EU, Brazil, China and especially the United States grew more maize. Barley is the most widely grown in the EU, followed by Australia, Russia and Ukraine.

Who mainly imports these cereals?

The largest wheat importers in 2020, according to the Observatory of Economic Complexity (OEC), an international trade data visualization site, were Egypt ($5.2 billion), China ($3.47 billion), Turkey ($2.44 billion), Nigeria ($2.15 billion) and Indonesia ($2.08 billion). Egypt was also the largest buyer of specifically Ukrainian wheat, according to statistics.

For maize, the most recent OEC figures available are from 2018, with the main importers Mexico ($3.14 billion), Japan ($2.94 billion), South Korea (1 .92 billion dollars), Vietnam (1.85 billion dollars) and Spain (1.72 billion dollars). The main buyers of Ukrainian corn were the Netherlands, Spain and China.

The top barley importing countries in 2020 were China ($1.77 billion), Saudi Arabia ($1.38 billion), the Netherlands ($512 million), Belgium ($369 million of dollars) and Germany (307 million dollars). China was the biggest buyer of Ukrainian barley.

How is Russia’s war in Ukraine affecting the world grain market?

Cereal deliveries were initially suspended due to Russia’s blockade of Ukrainian ports, fueling fears of global shortages and price hikes. By mid-May, export prices for wheat and maize had reached record highs. This had far-reaching consequences, particularly in Africa, the Middle East and Asia, according to the UN, countries where the coronavirus pandemic and its fallout had already worsened the food situation.

In the meantime, the pressure on the grain market has eased somewhat. The Food and Agriculture Organization of the United Nations (FAO) estimates that, despite the war in Ukraine, the 2022 world cereal harvest is likely to be only slightly lower than in 2021. It remains to be seen whether the Russia’s suspension of the grain export agreement will affect the world market. .

What did the agreement between Ukraine and Russia mean for exports?

Under the agreement reached in Turkey, the 20 to 25 million tonnes of grain currently blocked in Ukraine could finally be exported. Exports of Russian cereals and fertilizers, restricted due to sanctions against Russia, have also been facilitated.

The agreement also provided for secure corridors in the Black Sea between Ukraine and the Bosphorus; vessels in the area and ports concerned would not be attacked. A control center in Istanbul, run by the United Nations and staffed with representatives from Russia, Ukraine and Turkey, was to monitor grain exports.

The agreement between Ukraine and Russia was important for global food security. Cereals remain an urgent need on the world market, particularly in Asia and Africa. In the aftermath of Russia’s war of aggression in Ukraine, the United Nations has warned of the biggest food crisis in decades.

This article was translated from written in German. It was originally published on July 27 and updated on November 1 to reflect Russia’s withdrawal from the grain deal.