Amid the ongoing Russia-Ukraine conflict, the supply chain from the Black Sea region has been disrupted. The Black Sea region is known as the “Breadbasket of the World,” with both Ukraine and Russia accounting for one-third of global food grain production. The region makes up more than 30 per cent of global trade in wheat, 32 per cent for barley, 17 per cent for corn, and more than 50 per cent for sunflower oils, seeds, and meals according to Reuters. However, as the war intensifies, Ukrainian farmers are either fleeing the country or joining the forces to resist Russian invasion, whereas the western sanctions imposed on Russia are a blockade for the imports of food grains in the country.
These Countries Will Get Affected
The European Union has already warned that the ongoing Russia-Ukraine war will be painful for the agri-food industry. According to Associated Press, even a week before the war, the prices of wheat have surged 55 per cent. The prolonged conflict will not only impact the European countries, but Middle-East, Africa, and Asia will also bear the brunt of high wheat prices and supply-chain disruption.
Egypt, which is the major procurer of wheat from Ukraine and Russia, had to cancel two orders in less than a week as the war intensifies between Ukraine and Russia. Lebanon is another country where 60 per cent of its wheat demand is met through exports from Ukraine. According to the Associated Press report in 2020, African countries traded agricultural products worth $4 billion from Russia, out of which 90 per cent was wheat. Even on the Asian front, countries like Indonesia are heavily dependent on Ukraine to meet their wheat requirement. In 2021, Ukraine was the second-largest wheat supplier to Indonesia, accounting for 26 per cent of the wheat requirement in the country. However, as the war between Russia and Ukraine continues to escalate, these countries are already looking for alternatives to meet their wheat requirement.
Good News For Indian Wheat Exporters
India is the second-largest wheat producer in the world. It is estimated that India’s wheat export will touch 7 million this year. Food Secretary Sudhanshu Pandey on March 5 had said that India’s total shipments touched a record-high of 6.6 million tonnes this fiscal so far.
Notably, India’s new wheat crop will be available for exports from March 15.
“Russia and Ukraine together account for almost a quarter of the global wheat supply. Their wheat crop will mature in August and September this year. As a result, global wheat prices have already gone up and are ruling in the range of Rs 24,000-25,000 per tonne,” Pandey said.
According to the data available with the second-advanced estimates by the Ministry of Agriculture, wheat production is set to touch a record high of 111.32 million tonnes in FY2021-22, as against the 109.59 million tonnes in FY2020-2021. This is higher by 7.44 million tonnes than the average wheat production of 103.88 million tonnes, the Ministry of Agriculture said.
According to research agency, Gro Intelligence, “India typically exports wheat to regional neighbors, including Bangladesh, the Philippines, Indonesia, Sri Lanka, Nepal, Yemen, and the United Arab Emirates. But with Black Sea shipments facing disruptions, India this year could find additional buying interest in the big wheat-importing regions of the Middle East and North Africa, where severe drought conditions are cutting into domestic wheat production.”
