Though the present political tensions between Russia and Ukraine haven’t but spilled over to international agricultural commodity markets, it may have severe implications for the remainder of the world.
If Russia invaded Ukraine, as was being speculated by political analysts, sanctions can be imposed and this is able to undoubtedly disrupt the market, in line with Richard Krige, vice chairperson of Grain SA.
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“This can in all probability [result in an] improve within the worldwide wheat worth, and relying on the [exchange rate of the] rand, it may additionally impression the South African wheat worth.”
In a current publication, Wandile Sihlobo, chief economist of Agbiz, mentioned farmers wanted to keep watch over the rising stress between these two nations, as a result of Russia produced about 10% of worldwide 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 worldwide wheat exports and Ukraine for 8%.”
These two nations have been thus liable 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 through the 2020/21 season.
This was considerably lower than the simply over 522 000t and about 83 900t imported from the 2 nations respectively through the earlier season.
The nations have been additionally vital gamers within the sunflower oil business, Sihlobo added.
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“In 2020, Ukraine accounted for 40% and Russia for 18% international sunflower oil exports.”
Sihlobo mentioned he believed that South Africa’s agriculture sector would undoubtedly really feel the impression of the “rising temperature between the nations by way of the worldwide agricultural commodity worth channels”.
“There may be some direct agricultural commerce between South Africa and the 2 nations, 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.”
Basically, 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.”
