The adage that “unhappiness often does not come alone” is coming true. In a context of general shortage, the world could not only miss wheat exports from Ukraine this year, but also without those from Russia. Even the possible absence of the Ukrainian harvest is anything but insignificant, as it will probably amount to around ten million tonnes this year, which are mainly available for export, the absence of Russian wheat on the international market could make serious damage to global consumption.
The period of decline of the war between Russia and Ukraine being far, the economic consequences will be prolonged bringing a hard blow on the market of the consumption of wheat in the world, without counting the fuel, which him also causes increases worrying and even panics the various stock exchanges. Russia’s position is all the more important as it is the largest wheat exporter in the world ahead of the countries of the European Union. For the current year, the US Department of Agriculture estimates that a wheat crop of about 33 million tons will be harvested from Russian fields.
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However, Russian cereal producers expect an increase in production. They estimate that an export volume of 35 million tonnes will be available. One can nevertheless wonder whether this quantity of wheat of this magnitude will actually be exported at the end.
Kremlin adds another turn of the screw
Although Russian wheat supplies are not yet subject to direct Western sanctions, they are still indirectly affected by the sanctions, as payment for the supply would have to be handled by Russian banks, which are currently excluded from the SWIFT system.
Even more serious, however, is the fact that Russia itself introduced an export tax some time ago. This is a Kremlin strategy to better control the price at home. As if that weren’t enough, Russia also imposed an export ban on wheat, barley, rye, corn and mixed grains this year. This new Moscow provision is valid until June 30, 2022 and concerns the countries of the Eurasian Economic Union, namely Armenia, Kazakhstan, Kyrgyzstan and Belarus. Previously, these countries had not been affected by the export tax and export quotas. The fact that these countries now have to live with these new Russian restrictions is already to be expected from further Russian measures on exports to the rest of the world.