We are witnessing history.
Tensions between Russia and Ukraine have seen natural gas and crude oil prices soar, but the impact of the dispute between the two countries on global commodity supply is not limited to energy.
👇 Look at a set of data 👇
Mainland Agricultural Imports from Ukraine (2021)
Ukraine is an important source of grain and oil imports from the mainland. The import volume of virtual arable land resources from Ukraine ranked sixth, with imports of 3.637 million hectares in 2021, accounting for 3.7% of the total imports of virtual arable land resources on the mainland.
In 2021, Ukraine is a major source of corn, barley and sunflower oil imports from the mainland, with imports of 6.398, 2.268 and 877,000 tons respectively.
So, as an important importer of wheat and corn, will such a tense situation between Russia and Ukraine have an impact on the mainland's grain supply?
Since the Russian-Ukrainian conflict, Chicago corn, wheat and other agricultural futures have risen for many days, although Russia has tried to downplay the risk, but the market's concerns have not eased.
Under the tension between Russia and Ukraine, the futures prices of wheat, corn and other agricultural products soared across the board. Markets fear that world food security could be at risk if the conflict escalates.
Russia has always been one of the world's major "breadbaskets", while Ukraine is also known as the "European bread basket", and the conflict between the two sides may have an impact on major commodity markets such as wheat, barley, corn, rapeseed oil and so on. Let's take corn and wheat as examples to focus on the analysis.
Corn: Futures prices rose nearly 40% year-on-year
In terms of production, the global corn harvest area is estimated at 200 million hectares for 2021/22, with a total production of 1.21 billion tonnes, according to the USDA data of the USDA. Among them, Ukraine's corn production was 42 million tons, accounting for 3.5% of the world's total production; Russia's corn production was 15 million tons, accounting for 1.2%.
In terms of exports, global maize exports are estimated at 200 million tonnes in 2021/22. Among them, Ukraine's corn exports were 33.5 million tons, accounting for 16.4% of the total global exports and 80% of the country's corn production; Russia's corn exports were 4.5 million tons, accounting for 2.2% of global exports.
Customs data show that in 2021, the mainland will import 8.24 million tons of corn from Ukraine, accounting for nearly 30%.
In recent times, the import price of corn has continued to rise. From 1900 yuan per ton at the end of last year, it has risen to the current 2600 yuan per ton. Experts believe that once the conflict intensifies, it will continue to push up the import price of corn in the short term.
If the region continues to be volatile, leading to trade disruptions, it could cause prices of related agricultural products to continue to rise and further global food prices, already at their highest level in 10 years. At the same time, the mainland may aim its corn imports at other corn exporting countries in the short term, and it is not excluded that there will be international grain price speculation and increase the import cost situation.
Wheat: The current trading price is almost 30% higher
Although wheat is mainly consumed by rations, in recent years most countries regard it as an important strategic material, and the degree of international trade in wheat is relatively high, second only to soybeans.
According to the USDA, the global wheat harvest area in 2021/22 reached 220 million hectares, with a total production of 776 million tons. Among them, Ukrainian wheat production was 33 million tons, accounting for 4.3%, and Russian wheat production was 75.5 million tons, accounting for 9.7% of global wheat production.
In terms of exports, global wheat exports in 2021 will be 206 million tonnes. Among them, Ukraine's wheat exports were 24 million tons, accounting for 11.6%; Russia's wheat exports were 35 million tons, accounting for 16.9% of global wheat exports, making it the world's largest wheat exporter.
According to the OEC summary data of the visual data analysis platform, in 2019, Russia was the world's largest wheat exporter, accounting for more than 18% of the world's total exports. Ukraine, in fifth place, accounts for more than 7 percent of exports, and the two together contribute more than a quarter of global wheat exports.
Wheat from Russia and Ukraine is mainly exported to Egypt, Turkey, Bangladesh and some Middle Eastern countries. Among Asian countries, Indonesia, the Philippines, Thailand, South Korea and other countries also import wheat from Ukraine. Because of its geographical location, this trade is mainly carried out through the Black Sea, which is also the area where major countries exercise. In the event of a military conflict or more trade sanctions, there may also be disruptions in port trade near the Black Sea, affecting the prices of these related commodities.
In addition to wheat, Russia and Ukraine are also major barley exporters, Ukraine is one of the top five corn exporters in the world, and Russia also exports certain agricultural products such as rapeseed oil. In the era of globalization, changes in regional supply and demand relations will soon be transmitted to the world. The United States, which is involved in the conflict, may also need to bear the pressure of rising prices, although it is a major exporter of agricultural products.
Affected by geopolitical tensions, wheat futures prices traded on the Chicago Board of Trade have gained significant momentum recently, and are now trading nearly 30% higher than they were a year ago.
Source丨Nong Caijun comprehensively compiled from CCTV Finance, EggEr Agriculture, CITIC Futures Research
Editor 丨Nong Caijun
Contact Nongcaijun 丨 18565265490