The Black Sea Deal
Russia suspended its participation in the Black Sea deal, which provided a grain corridor to the world from the war in Ukraine. Wheat prices jumped immediately, as they would given that Russia and Ukraine together provide a quarter of the world's supply. That said, the war has already lead to fluctuations.
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" one quarter of the world's supply "
In the spirit of Roscoe Filburn:
What percentage of the world's grain is consumed (or fed to livestock) in the nation where it was first grown?
Do you know the answer to the question you’re asking, or do you want me to ask the AI?
Ukraine is nevertheless a big deal for countries that can’t grow enough grain, whether due to climate (Egypt, Israel) or war (Yemen). Disrupting the supply has big consequences.
Sure is a good thing the West leaped to shut down Russian grain exports as the first priority. Kind of hard to sound convincing when moaning about the starving masses after doing that.
Very little wheat is fed to animals-- the main food for them is corn and soybeans. The numbers Grim are citing are the volume of exports, in any event; Ukraine and Russia are leading exporters of wheat, producing far in excess of what their domestic consumption requires. As for Russian wheat being "shut down", the only bans in place are Russian export bans, not anyone else banning food imports. Now, if you're asking whether private shippers are willing to enter the Black Sea while a war is on, the answer is "of course not"... which situation is entirely the fault of Russia, not Ukraine.
It's still a crying shame, though. Places like Egypt are already in serious straits, and now this; we'll likely see food riots in the poor world.
Janet
Yes, exactly. Yemen too has its own war, and has heavily depended upon Ukraine (and Russian wheat too).
I spoke to a guy today who said that the Ukrainian crop is mostly hard red wheat that’s harvested over the winter. He thinks the market will absorb this without too much shock. The issue could be resolved by planting time, but the war is hard on farmers too.
I was a bit abrupt and regret the implied insult to many concerned.
That said, looking up the fraction for domestic consumption of any commodity is intrinsically a bit more troublesome than measuring goods in international (or interstate) commerce. While the logistics of trade involve weighing the load, fitting a volume into a container, and of course pricing it out in currencies themselves traded at known values, local use is usually only estimated. It's true for food and fodder and fuels and tools. When speaking of Russia and Ukraine I'm old enough to remember the re-assessments of production issued just after the fall of the USSR. Turns out -- those estimates re-estimated -- that over half the foods consumed by Soviet citizens was grown on private allotments and traded in more-or-less shadowy markets or under odd legal loopholes. The planned harvest from the collective farms were almost every year over-stated.
Even in free market communities, like Texas, when prices rise and availability falls there are shifts that affect the ability of planners to measure. A lot of neighbors around here this past year have started, or increased the size of, chicken flocks and vegetable gardens. The hobby ranchers are buying less hay and rotating stock on pastures more frequently. Stuff happens the economists don't, and maybe can't, track.
And I am inclined to suspect the same sort of stuff affects claims about international markets.
It was interesting to note the falling water levels in the Mississippi River which curtailed barge traffic, our own wheat heading overseas from places in Nebraska and Kansas.
Oh for cryin' out loud. Who do you think is controlling the weather in the midwest-- Putin? Biden? The CIA? The Illuminati?
You need to step away from the screens for a bit. The people you're interacting with are bat**** crazy, and talking you into obvious nonsense. There was a bid drought last year, remember? So the water level dropped low. And then there was record snowfall in the Rockies over the winter, remember? So now water levels are rising quickly. No conspiracy, just the weather.
Janet
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