How Ukraine crisis will impact wheat prices

A number of commodities like oil, metals, and microchips, have soared in value amid the Ukraine and Russia conflict. Wheat, another commodity exported in large quantities by the nations, has also risen to record levels.

Russia and Ukraine together account for more than a quarter of global wheat exports and are among the top five producers of the food grain.

The United Nations' Comtrade database places Russia and Ukraine in the top five highest exporters of wheat, having transported 37.3 million tonne and 18.1 million tonne, respectively, in 2020.

Moscow's invasion pushed the wheat price far above its previous record high in European trading to €344 ($384) a tonne on Thursday.

Also Read | Five essential commodities that will be hit by war in Ukraine

Much of West Asia (Middle East), and North Africa are dependent on the two countries for their wheat supply.

Egypt, Turkey, and Bangladesh bought more than half of Russia's wheat in 2019, sources said told PTI.

Egypt is the world's biggest importer of wheat. It spends more than $4 billion annually to feed its population of over 100 million. Russia and Ukraine cover more than 70 per cent of Egypt's imported wheat demand.

Turkey is also a big spender on Russian and Ukrainian wheat with 74 per cent of its imports worth $1.6 billion coming from those two countries in 2019.

From July 2021 to January 2022, Turkey, Iran and Egypt were the top importers of Russian wheat, having bought 5.8, 5.1 and 3,4 million tonne of the food grain.

Another large importer, Algeria, has clarified that the war would not impact its wheat supply. Algeria does not rely on one supplier but several as its market is open for competition, the source, from the Office Algerien Interprofessionnel des Cereales (OAIC), said.

India and China, which meet most of their wheat needs from domestic cultivation, would remain unaffected. In fact, demand is beginning to shift to alternative export origins including India and the European Union, according to two people familiar with the matter.

India's central pool stood at 24.2 million tonne, twice more than the buffer and strategic needs, sources said.

(With agency inputs)

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