Miller Magazine Issue: 149 May 2022

MARKET ANALYSIS 104 MILLER / MAY 2022 supply wheat to this region in order to replace Ukraine. But due to the low manufacturability of production, very archaic logistics and strong dependence on climate, it is already clear that these plans are not destined to be fully realized. To begin with, let's consider whether India can be not an occasional, but a permanent reliable supplier of wheat? Not yet. As can be seen from the graph, even over the past 20 years, Ukraine has been a stable supplier to the world, and exports prevailed over imports, and with a constant growth trend. The population of Ukraine did not grow, animal husbandry did not develop, and with the grow- ing volume of production, domestic consumption did not increase, making it possible to sell more and more to the world. This allowed for investment in quality and infrastructure. At the same time, India is almost always self-sufficient or even forced to import. Export here is rather an exception to the rule. The quality is not always comparable with competitors so far, and therefore wheat is traded at a discount. Strong exports amid a drought could lead India to start importing in January. At the same time, China and the US are seeing one of the worst conditions for winter crops, and drought could develop in Europe. The previous season for a number of European countries was a record one, but at the same time, there were quality problems. This season, we are no longer talking about records. France, Romania, per- haps even Germany, due to the drought, can get yields 15-30% lower than last year, which is barely above aver- age. In the current conditions, when Ukraine was locked up by Russia, this is certainly not enough. The main mistake of all those who are now looking only at the stock to use ratio is that they believe that the grain that was not taken out of Ukraine this season can be considered as carryover stocks and left in the balance. But it's not. Grain consumption in Ukraine is several times lower than production. Ukrainian farmers could not even sow - Ukraine itself would have enough stocks for several years. But before the war, 84% was exported through ports. Now they are either occupied by Russia, or dam- aged, or simply blocked and shipping there is danger- ous for life and cargo. Legally exporting grain and other goods from Ukraine is the number one issue for glob- al food security. Conventionally, for an ordinary person somewhere in Lebanon, the fact that there is grain, but lies in a warehouse in Ukraine, does not make life easier. Ukraine has done a tremendous job of reorienting lo- gistics very quickly and realigning it towards the west- ern borders. Europe is on the move. But the capacities for transshipment from Ukrainian to European wagons, for the accumulation of large consignments, for loading onto boats in European ports were not ready for such