Russian Foreign Minister Sergei Lavrov is in Turkey on Wednesday June 8 to discuss the establishment of maritime corridors and to discuss the possibility for Ukraine to export its crops blocked in its ports. A blockage which is causing prices to soar and posing the threat of famine in certain countries of Africa and the Middle East. “Wheat, there will be some”but “At what price”, wonders about franceinfo Arthur Portier, expert in the analysis of international agricultural market prices. This consultant for Agritel fears “social unrest” on a large scale but not necessarily “famine”in the coming months.
franceinfo: Do we have any idea of the number of thousands of tonnes of wheat currently stuck in Ukraine?
Arthur Porter: So, to this day, it’s not just wheat. It is all cereals in large part, that is to say barley, corn and wheat, which are estimated at between 20 and 25 million tonnes blocked on Ukrainian territory, which is a lot. This represents quite large sums. If you just take wheat production last year in Ukraine, it was around 33 million tonnes. If you take maize production, we were around 42 million tonnes. But above all there is the export part. When we know the place of Ukraine in exports, particularly in wheat, since it is the fourth largest exporter worldwide in 2021, this automatically disrupts all global flows.
So what is the consequence of this disruption?
To date, there are several consequences. The first is rather logistical, with partial or total blockages of Ukrainian ports. So anything that can’t get out by sea has to go by land. And when you know that it takes at least 50 trains to replace a boat, that already disrupts internal logistics.
Secondly, you have countries that usually import Ukrainian wheat. I am thinking of Tunisia, which will – for example – usually get 45% of its supplies from Ukraine. The country must review its flows, seek wheat elsewhere. Demand will concentrate on a few exporters, including France, at price levels that are currently higher due to the current imbalance between supply and demand at the international level. This can create social unrest in many importing countries. It is this demand which has changed, which has changed, which is causing prices to soar at the moment.
Are importing countries at risk of famine?
One can hardly use the word famine right away. What is certain is that we can speak of social unrest. That is to say that wheat, there will be some. There are some internationally. Now, what is the price? Is this wheat accessible? We have availability, there are volumes. Russia is going to have a great harvest next year. Now, how do you make that wheat available? This is the whole subject of the meeting between the Russian and Turkish authorities in Ankara, Turkey. This obviously poses other problems: political, geopolitical and obviously international consensus to lift the sanctions on Russia in particular. There are social unrest to be expected in many countries and that is to be feared.