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Cereal exports are impacted by logistics

Cereal exports have been affected by logistics and financing problems as a result of the conflict between Russia and Ukraine, highlighted a report from the World Trade Organization (WTO).

To begin with, most of the Russian Federation’s Black Sea port terminals were operational in mid-March, but some restrictions remain in place in the Sea of ​​Azov.

Although cargo operations have recently resumed, volumes could be affected by trade finance restrictions and additional ocean freight insurance requirements.

Additional exports from other origins, mainly India, the United States, the European Union and Brazil, are unlikely to more than partially offset the decline in shipments from the Black Sea for the remainder of the current season.

The WTO expects high prices to dampen demand, so world trade in wheat and maize in 2021-2022 is projected to be below previous forecasts of -3m tonnes for wheat, respectively. and -7 million tons for corn.

In general, since Russia and Ukraine are among the world’s leading exporters of grains and oilseeds (and grain and oilseed products), the current conflict and the resulting rise in agricultural prices have fueled concerns regarding potential risks to food security, especially in import-dependent countries in the Near East and Africa.

Cereal exports

Due to the volatile situation, the International Grains Council (IGC) supply and demand forecasts are provisional and subject to great uncertainty.

From the WTO angle, the most imminent threats focus mainly on the disruption of export flows.

Commercial cargo operations at Black Sea ports are currently suspended in Ukraine.

While efforts are underway to increase exports via rail lines across the country’s western borders, total volumes are likely to be limited.

An export licensing system for wheat, maize and sunflower seed oil has recently been introduced, while shipments of barley, rye, oats and millet are currently prohibited.

While the magnitude of infrastructure losses is unknown, potential damage to port facilities, rail lines and storage silos could affect shipments in the longer term.

 

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