Miller Magazine Issue: 148 April 2022

36 MILLER / APRIL 2022 NEWS USDA reduces estimated wheat exports from both Russia and Ukraine In its March World Agricultural Supply and Demand Estimates (WASDE) report, the USDA forecasts that 2022 world exports of wheat are expected to drop 3.6 million metric tons from last month’s estimate of 206.7 mil- lion tons, accounting for disruption in vessel transportation out of Black Sea ports. “Russia’s recent military action in Ukraine significantly in- creased the uncertainty of agricultural supply and demand conditions in the region and globally,” the USDA said in its latest report. Tight supplies resulting from Russia’s invasion of Ukraine jeopardize food security in regions, such as the Middle East and northern Africa, that rely heavily on wheat from the Black Sea region. Ukraine has suspended port op- erations for commercial activities since February 24. Russian grain movement through the Black Sea is also affected by exceptionally high insurance premiums for ves- sels. In addition, the sanctions that have been applied make commer- cial transactions challenging. In re- sponse, grain prices have soared for all major exporters. USDA reduced estimated wheat exports from both Russia and Ukraine by 7 million tons—or near- ly 12% of pre-invasion projections. “Exports are lowered for Ukraine by 4 million tons to 20 million, as the conflict in that country is expected to disrupt exports from the Black Sea region. Rus- sia exports are reduced 3 million tons to 32 million as vessel transportation is expected to be constrained by the conflict and the imposition of economic sanctions.” Although the pessimistic projection has been partially offset by abundant rainfall and better-than-expect- ed harvests in Australia and In- dia, and to a lesser extent Cana- da, global wheat exports are still projected to drop by around 3.6 million tons when compared to pre-conflict estimates. Imports are lowered for many countries including Turkey, Egypt, the EU, Afghanistan, Algeria, Kenya, Pakistan, Tanzania, and Yemen based on reduced Black Sea wheat export availability and higher world prices. Ukraine accounts for 10% of the world wheat market, 13% of the barley market, 15% of the Source: USDA