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Ukrainian Farm Export Disruptions Continue, as Drought Impacts on U.S. Wheat Persist

Bloomberg writers Daryna Krasnolutska and Aine Quinn reported today that, “Ukraine said its crop shipments through the Black Sea safe-passage corridor remained suspended for a second day, adding to uncertainty about future supplies from the key agriculture exporter.”

“The latest disruption to the seaborne shipments comes at the same time as three of Ukraine’s European Union neighbors have stopped allowing imports of some of its agricultural cargoes — threatening a key alternative route to export markets. Poland, Hungary and Slovakia in recent days banned imports of Ukrainian grain over concerns the supplies are hurting their domestic markets.

“Ship inspections were also briefly halted last week, and Moscow has indicated it may quit the initiative if its issues regarding its own grain and fertilizers aren’t resolved by mid-May.

The threat underscores uncertainty over the export deal that has been crucial for bringing down global food-commodity costs from records reached after Russia’s invasion.

The Bloomberg writers explained that, “Benchmark wheat futures touched the highest in almost three weeks, but the market reaction to the disruptions has been relatively muted — it’s not a peak time for crop shipments and the new harvest is several months away. Prices rose 0.4% to $7.1025 a bushel in Chicago, bringing this month’s gain to 2.6%.”

“Ukraine Says Vital Black Sea Crop Exports Remain Disrupted,” by Daryna Krasnolutska and Aine Quinn. Bloomberg News (April 18, 2023).

And Bloomberg writers Deana Kjuka, Aine Quinn and Daryna Krasnolutska reported yesterday that, “Ukraine’s crop exports are being threatened again, with Black Sea shipments halting just as some of its European Union neighbors stop allowing imports of its cargoes.”

“For now, traders don’t appear to be hugely concerned, with supplies from the new season several months away,” the Bloomberg article said.

Also yesterday, Reuters writer Pavel Polityuk reported that, “Kyiv said on Monday a U.N.-brokered initiative allowing the safe Black Sea export of Ukrainian grain was in danger of ‘shutdown’ after Russia blocked inspections of participating ships in Turkish waters.”

The article noted that, “”For the second time in 9 months of operation of the Grain Initiative, an inspection plan (for participating vessels) has not been drawn up, and not a single vessel has been inspected,’ Ukraine’s restoration ministry said on Facebook under the headline ‘Grain initiative under threat of shutdown.'”

Meanwhile, Reuters writer Pawel Florkiewicz reported today that, “Ukraine will try to unblock exports of food and grain through Poland in a second day of talks in Warsaw on Tuesday after some of its staunchest allies in central Europe imposed bans on its products.”

The article pointed out that, “The bans come as a deal allowing Ukraine to export millions of tonnes of Ukrainian grain via the Black Sea is set to expire on May 18.

“Russian demands have left the prospect of an extension of the deal uncertain.

The combined impact of the bans and failure to agree an extension would strand millions of tonnes of grain inside Ukraine, a major agricultural producer that generate a substantial part of its gross domestic product from grain and food sales.”

Also today, Reuters writer Humeyra Pamuk reported that, “Russia is breaking its promises to countries around the world that are dependent on grain that has not been able to get out of Ukraine over the last few days, U.S. Secretary of State Antony Blinken said on Tuesday.”

Reuters writer Naveen Thukral reported today that, “Chicago wheat rose above $7 a bushel for the first time in nearly three weeks on Tuesday after a U.S. government report showed the condition of winter crop at an all-time low, and several Eastern European countries banned grain imports from Ukraine, raising global supply concerns.”

2023 Crop Progress and Conditions. USDA- National Agricultural Statistics Service (April 17, 2023).

“‘The USDA’s latest weekly crop progress report for the U.S. shows that the winter wheat crop condition remains poor due to extended drought conditions in major producing regions,’ ING said in a note.”

U.S. Agriculture in Drought. USDA- Office of the Chief Economist (April 13, 2023).

“The U.S. Department of Agriculture (USDA) on Monday rated 27% of U.S. winter wheat in good to excellent condition, unchanged from a week ago and the lowest for this time of year in records dating to the late 1980s,” the Reuters article said.

Elsewhere, Dow Jones writer Kirk Maltais reported yesterday that, “Export inspections for U.S. corn jumped from the previous week, bringing the large gap in total exports slightly closer to last year.

“In its latest grain export inspections report, the U.S. Department of Agriculture said corn export inspections for the week ended April 13 totaled 1.22 million metric tons, up from 839,165 tons the previous week. Soybean inspections totaled 526,376 tons and wheat inspections totaled 239,907 tons, both down from the previous week.

“Strong exports for corn this week helped to slightly narrow the difference between inspections from last year and this year, although total inspections remain 35.5% behind last year’s pace, the USDA said.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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