Though the present political tensions between Russia and Ukraine haven’t but spilled over to international agricultural commodity markets, it might have severe implications for the remainder of the world.
If Russia invaded Ukraine, as was being speculated by political analysts, sanctions could be imposed and this may undoubtedly disrupt the market, in keeping with Richard Krige, vice chairperson of Grain SA.
“This can most likely [result in an] improve 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 publication, Wandile Sihlobo, chief economist of Agbiz, stated farmers wanted to regulate the rising pressure between these two international locations, as a result of Russia produced about 10% of world wheat volumes, whereas Ukraine accounted for 4% of the entire.
“The wheat is, [however], not only for home consumption, however for export markets. In 2020, Russia accounted for 18% of world wheat exports and Ukraine for 8%.”
These two international locations had 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 had been additionally important gamers within the sunflower oil trade, Sihlobo added.
“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 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.”
Typically, Russia was a notable export marketplace for South Africa, being the thirteenth largest.
“The primary agricultural merchandise South Africa [exports] to Russia and Ukraine are citrus, nuts, greens and tobacco. However usually talking, South Africa has stronger agricultural ties with the remainder of Africa, Asia, the UK and the EU.”