While you are training for diversity and destroying your own infrastructure, somebody else is training for war. When you meet them, they will win.
(h/t Claudio) Feb 27, 2022, (Bloomberg) –Russia’s invasion of Ukraine is rippling through global crop markets, with some traders warning they’re unlikely to offer wheat from the vital Black Sea region at a closely watched tender on Monday, while others won’t participate at all.
Egypt is one of several countries in the Middle East and North Africa that rely on massive wheat imports to feed their citizens, and Black Sea nations — particularly Russia and Ukraine — are key suppliers. Egypt canceled a previous tender on Thursday after only receiving one offer of French wheat and has now scheduled a new one.
While ports in Ukraine are closed, some Russian exporters are currently fulfilling existing contracts and ships are departing, said one person familiar with the matter. Still, at least one shipping company had vessels loaded with grain that were unable to depart a Russian port as of Friday evening, another person said.
And new deals are not being made. Traders say they are staying away from Russian grain, while exporters can’t agree to contracts at the moment because they don’t know if they will be able to fulfill them as the situation evolves, people familiar with the matter said.
The uncertainty caused by the war means that importing nations are looking at their alternatives to buy from elsewhere. But the options may be limited as Russia and Ukraine together account for more than a quarter of global wheat trade and nearly a fifth of corn.
The disruptions come at a time when global crop prices have already soared to records, fueling inflation and hunger levels, while grain stockpiles have been declining. If Russia and Ukraine were both to leave the global grain market for an extended period it would have a dramatic effect on world food supplies and prices.
Ukraine probably has about 6 million tons of wheat left to export in the current season, and as much as 14 million tons of corn, Andrey Sizov, head of consultant SovEcon, said in a note last week. Russia has around 7 million to 7.5 million tons of wheat to export, he said.
There are a number of reasons why Russia invaded Ukraine, and control of wheat and grain that sustains much of Europe, Asia and Africa is but one.