Ukraine war imperils wheat; India, Aus ramp up export


Land paddy cultivated near Majeed's shop being harvested

United Arab Emirates: Russia's war in Ukraine has forced farmers worldwide to weigh in whether to change their planting patterns and grow more wheat this spring as the war has choked off or thrown into question grain supplies from a region known as “the breadbasket of the world”.

Countries like Australia and India have responded with increased grain exports, but there's little room for others to immediately do the same, mainly due to recurrent drought, experts have said.



Ed Kessel, who has a farm along a quiet stretch of western North Dakota, said he may plant some more wheat and ride the tide of high prices that have spiked by a third since the invasion, helping offset losses from drought and the increasing cost of fuel, but not a lot more.

“Honestly, it probably will help us plant a few more wheat acres. We'll put a few more acres into wheat and a few more into sunflowers,” said Kessel, also first vice president of the North Dakota Grain Growers Association.

Ukraine and Russia account for a third of global wheat and barley exports, which countries in the Middle East, Asia and Africa rely on to feed millions of people who subsist on subsidised bread and bargain noodles.

They are also top exporters of other grains and sunflower seed oil used for cooking and food processing.

Major grain producers like the United States, Canada, France, India, Australia and Argentina are being closely watched to see if they can quickly ramp up production to fill in the gaps from lost Ukrainian and Russian supplies.

Farmers, however, are facing the prospect of another year of drought, climbing fuel and fertiliser costs, and supply chain disruptions from the COVID-19 pandemic.

Major producers also are hamstrung by factors like legal limits on exports and farming patterns, meaning uncertainty for countries like Egypt, Lebanon, Pakistan, Iran, Ethiopia and others that cannot grow enough wheat, barley, corn or other grains to meet their needs.

The International Grains Council in its March report said any extra grain exports from anywhere in the world “will likely only partially offset lower Black Sea shipments over the remainder of the current season”.

The war has raised the spectre of food shortages and political instability in countries that rely on affordable grain imports.

About half of the grain the World Food Programme buys to feed 125 million people worldwide comes from Ukraine.

The double blow of rising food prices and depressed wheat exports from the war is a recipe for “catastrophe not just in Ukraine, but potentially globally," the head of the UN food assistance agency warned.

“It will impact millions and millions of people, particularly in the poorest countries of the world,” WFP Executive Director David Beasley told The Associated Press in the western Ukrainian city of Lviv last week as he visited a refugee centre where food aid was distributed.

There are unanswered questions about how Western sanctions on Russia, the world's top wheat exporter, could affect its grain exports and distribution networks.

Russia is also the biggest exporter of fertiliser, while Ukraine ships huge amounts of corn, rye, oats and millet. The Black Sea region is a top producer of the grains used to feed livestock worldwide.

Arnaud Petit, executive director of the International Grains Council, pointed to drought and farmers switching to more profitable crops for shortage of foodgrains.

The US produced around 44 million tons of wheat for the 2021-2022 season. Just two to three years ago, it was over 50 million tons.

Canada, Argentina and Australia could try to ramp up wheat production for the coming season that ends in mid-2023, but it's too early to tell if farmers are changing their planting patterns to focus more on grains like wheat.

Doug Martin said it was too late for his family farm in Manitoba, Canada, to make significant changes to what was being planted now. Plus, growing a range of crops spreads out risks.

“Most producers have a set idea of what they are seeding and will probably stick to that,” Martin said.

Although higher wheat prices will reap earnings for farmers, but that is not enough incentive to expand production because prices are also climbing for crops like oats, canola and barely.

Australian farmers experienced a bountiful wheat season. Still, the agriculture department says Australia will not be able to respond to lower Ukrainian supplies right away because it has already sold its exports through September.

The situation is similar in Argentina, another major grain exporter. A whopping 95 per cent of its current wheat crop has already been sold.

The calculus leaves the world's biggest wheat importers vulnerable, including Indonesia, Egypt, Pakistan and Bangladesh as well as war-torn Yemen and cash-strapped Lebanon.

Drought in the Middle East is at its highest level in at least 20 years, according to the Gro Drought Index, hindering any efforts to ramp up domestic wheat production.

There is potential for unrest if prices continue to rise, particularly in nations without sufficient stocks of wheat. They may be forced to wait to purchase it from the market, switch to rice or draw from their wheat reserves.

In Egypt, the world's biggest wheat importer, the government recently announced price caps for unsubsidised bread and fines for violators in response to soaring prices.

The world has 278 million tons of wheat stock to help buffer shortfalls from Ukraine, said Petit of the International Grains Council.

(AP)

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