The international grain markets are acutely aware of the growing significance of the Ukraine in meeting global demand needs for a variety of grains and oilseeds. Following weekend developments that included the insertion of Russian troops into the Ukraine's Crimean region, grain and oilseed prices have surged higher.
The largest gains are seen in wheat and soybena oil. The Ukraine is a major wheat exporter and the world's number one exporter of sunflower oil. The grain trade is casting a wary eye to the stability of the Ukraine and its ability to meet expected export trade commitments for major grains and oilseeds.
In such a fast changing political environment, short-term developments that may impact agricultural export trade are totally unpredictable. In this Economist Update, we have taken inventory of the major grains and oilseeds exported from the Ukraine.
The Ukraine has emerged as one of the largest corn exporting countries. Ukraine is slated to export 18.5 million tonnes of corn this year.
At that level, it will eclipse Argentina becoming the third largest corn exporter behind the US and Brazil. Ukraine has captured market share from the US, shipping corn to some traditional US destinations including South Korea and Japan accounting for 16.4% of global corn trade. Ukraine is also a significant wheat exporter, expected to ship 10 million tonnes of wheat this year which is 6.4% of world trade.
Ukraine is the sixth largest wheat export, but is well below number five Australia at 18.5 million tonnes. Ukraine’s barley exports are forecast at 2.5 million tonnes or 12.4% of world barley trade. Ukraine is expected to tie with Russia as the fourth largest barley exporter this year, but was the largest barley exporter as recently as 2009/10.
The Ukraine is the world’s largest sunflower producer and by far the world’s largest exporter of sunflower oil. Sunflower oil exports project to 4.1 million tonnes in 2013/14 and that represents a dominating 58% of global exports.
Versus other major vegetable oil exporters, the Ukraine’s exports are similar to Argentine soyoil exports at 4.5 million. Canada’s canola oil exports total 2.7 million. The US exports less than one million tonnes of soyoil. The Ukraine also produces another popular European oilseed - rapeseed.
Instead of crushing that into oil for export, the majority of its trade is in the seed. At 2.2 million tonnes, that represents 16% of world trade of 13.6 million. We have also included soybeans in the chart at 1.9 million tonnes or not quite 2% of world trade.
Obviously, it is not a significant factor for soybean trade compared to the dominating US and South American countries. But it is a country to keep an eye on over the next few years to see if in calmer times ahead if it accelerates production and trade, much as it has in some other competitive grain markets.