Things are a little tense in Eastern Europe. (The understatement of the year.)
With Russia amassing troops along the Ukrainian border and western nations vowing to preserve Ukraine’s sovereignty, everyone is on pins and needles.
Including the ag industry.
Wheat goes wild: Wheat prices have experienced a recent bump, and analysts attribute it to the situation in Ukraine. It’s an important international wheat producer/exporter, so the region’s uncertainty is creating a bullish market.
Great exportations: Grain exports are at the center of the Ukrainian economy. Poised to become the world’s #3 wheat exporter and #4 corn exporter in the coming year, Ukraine exports over 75% of its corn and wheat crop.
To put it in context, the U.S. exports about 20% of its crop.
What’s more? Combined, Russia and Ukraine contribute about 30% of the world’s total wheat exports. A major conflict will almost assuredly disrupt international trading… and drive up wheat prices.
But that’s not all.
Feeding the world: In recent years, over 40% of Ukraine’s wheat and corn exports were sent to Africa and the Middle East. For nations that rely on imports to feed their populations, a trading disruption could have dire consequences.
Where this goes: As Russia blames the tension on western hysteria, NATO and western nations are looking at Russia’s 100,000 troops and saying, “Uh, no… you are the problem.”
As the world watches what will unfold, one thing is certain: Conflict escalation in Ukraine will certainly lead to severe pains—in international grain trading and potentially in the stomachs of millions who rely on Ukrainian wheat.