Ukraine-Russia Tensions: What it Could Mean for Agriculture
The political tensions between Ukraine and Russia continue to mount. Russia has placed 100,000 troops on Ukraine’s borders, and the Pentagon ordered 8,500 troops on higher alert Monday to potentially deploy to Europe as part of a NATO “response force” amid growing concern that Russia could soon make a military move on Ukraine.
Ukraine is a key player in global agriculture, and how these conflicts play out will have international impacts. Ukraine has more than 41.5 million hectares (or 102.5 million acres) of agricultural land that cover 70% of the country.
In 2020, Ukraine’s agriculture sector generated approximately 9.3% of GDP. Crop farming, which accounts for 73% of agricultural output, dominates Ukrainian agriculture, according to the International Trade Administration.
The country’s main crops are sunflowers, corn, soybeans, wheat and barley. Globally, Ukraine ranks:
- 1st in global sunflower production (For 2021/22 Ukraine sunflower seed production is estimated at a record 17.5 MMT)
- 6th in global corn production. (For 2021/22 Ukraine corn production is estimated at a record 42 MMT)
- 6th in global barley production
- 7th in global rapeseed production
- 9th in global soybean production
- 9th in global wheat production
See what crops are produced where in Ukraine:
Ukraine has been a global supplier of wheat, corn and sunflower/sunoil, says Joseph W. Glauber, senior research fellow for the markets, trade and institutions division at the International Food Policy Research Institute.
This year, Ukraine is forecast to account for 12% of global wheat exports, 16% for corn, 18% for barley and 19% for rapeseed. The share of agriculture in export revenues for Ukraine increased from 26% in 2012 to 45% in 2020 amounting to $22.2 billion.
Most of the wheat gets shipped in the fall though they still export a little bit in the early winter, according to the Trade Data Monitor.
Corn exports start in the late fall after harvest and continues throughout the first half of the year.
Sunflowerseed oil is shipped most year-round though there is a little seasonal downturn in late summer as stocks of oilseeds are depleted awaiting the new harvest, Glauber says. In the mid-2000s, after implementation of export tariffs for unprocessed sunflower seed, Ukraine developed a leading sunflower oil industry and became the No. 1 exporter of sunflower oil in the world.
“So, any disruptions in trade would likely be more felt for corn and sunflowerseed oil than wheat, Glauber says. “Obviously, there would be major concerns if spring plantings were disrupted.”
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Markets React As Tension Mounts Between Russia and Ukraine
AgriTalk’s Davis Michaelson hosted Vince Malanga, president of LaSalle Economics, on Tuesday, Jan. 25, to dive into the current events and potential market impacts.
