The grain reserves of the globe’s largest exporters of wheat (the EU, Russia, the US, Canada, Ukraine, Argentina, Australia, and Kazakhstan) are expected to be reduced to 57 million tonnes, a nine-year low. These countries account for one fifth of the world’s reserves, while world wheat consumption is said to be 781 million tonnes. Thus, the reserves, according to analysts, is enough for the world for 27 days, and without the resources of Russia and Ukraine, even less than 21.
Last week, wheat prices on the Chicago Mercantile Exchange rose to their highest level since 2008 due to fears of grain supply disruptions, as now Russia and Ukraine, the two countries that account for up to 30 percent of the world’s wheat supply, are isolated from the international market.
As specified, the main wheat exporting countries by export value in 2020 were Russia with its 17.7 per cent in the world market, the USA and Canada with 14.1 per cent each, France with 10.1 per cent, and Ukraine with 8 per cent.
According to the UN Food and Agriculture Organization, prices worldwide have already reached record highs in February, up almost 21 percent from last year, and further supply disruption will worsen the situation. Moreover, Chicago wheat futures have reached highs not seen for the last 14 years, surging by 41 percent over the course of a week.
Farmers have also faced overall price increases on other components such as gasoline and fertilizers and, as Russia is also one of the suppliers of the three main types of fertilizers, farmers can additionally expect disruptions to these components.
“We’re paying more for parts. We’re paying more for everything so that all that stuff adds in, especially even transporting the fertilizer to get here, it costs more to get it here,” the owner of Suydam Farms (USA), Ryck Suydam, said, noting that the costs would fall on consumers as farmers opt to raise prices by 25-30 per cent.