- Pig

‘Rising Russia-Ukraine rigidity might have an effect on SA wheat worth’

The worldwide grain and oilseed sector is watching the escalating rigidity between Russia and Ukraine with growing trepidation, in accordance stakeholders. Photograph: Pixabay

Though the present political tensions between Russia and Ukraine haven’t but spilled over to international agricultural commodity markets, it might have critical implications for the remainder of the world.

If Russia invaded Ukraine, as was being speculated by political analysts, sanctions could be imposed and this could undoubtedly disrupt the market, based on Richard Krige, vice chairperson of Grain SA.

READ The fundamentals of wheat manufacturing

“This can in all probability [result in an] enhance within the worldwide wheat worth, and relying on the [exchange rate of the] rand, it might additionally influence the South African wheat worth.”

In a latest e-newsletter, Wandile Sihlobo, chief economist of Agbiz, stated farmers wanted to control the rising rigidity between these two international locations, as a result of Russia produced about 10% of worldwide wheat volumes, whereas Ukraine accounted for 4% of the overall.

“The wheat is, [however], not only for home consumption, however for export markets. In 2020, Russia accounted for 18% of worldwide wheat exports and Ukraine for 8%.”

These two international locations have been thus answerable for greater than 1 / 4 of all international wheat exports.

Grain SA’s import and export figures for the week of 31 January indicated that South Africa had imported simply over 204 900t of wheat from Russia and simply over 7 300t from Ukraine throughout the 2020/21 season.

This was considerably lower than the simply over 522 000t and about 83 900t imported from the 2 international locations respectively throughout the earlier season.

The international locations have been additionally vital gamers within the sunflower oil business, Sihlobo added.

READ When to plant sunflower for optimum yield

“In 2020, Ukraine accounted for 40% and Russia for 18% international sunflower oil exports.”

Sihlobo stated he believed that South Africa’s agriculture sector would undoubtedly really feel the influence of the “rising temperature between the international locations by way of the worldwide agricultural commodity worth channels”.

“There may be some direct agricultural commerce between South Africa and the 2 international locations, however it’s minimal. We primarily import wheat from Russia and Ukraine. Russia is the seventeenth largest agricultural merchandise provider to South Africa, and Ukraine the forty fourth.”

Usually, Russia was a notable export marketplace for South Africa, being the thirteenth largest.

“The principle agricultural merchandise South Africa [exports] to Russia and Ukraine are citrus, nuts, greens and tobacco. However typically talking, South Africa has stronger agricultural ties with the remainder of Africa, Asia, the UK and the EU.”

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