Page 39 - bne magazine February 2022_20220208

bne February 2022 Cover story I 39
If Russia invades Ukraine that would destroy its grain production and send global prices soaring at a time when they are already at multiyear highs.
War in Ukraine would send global grain prices soaring, threatening a possible repeat of the Arab Spring
Ben Aris in Berlin
Ukraine together with Russia is one of the world’s biggest grain exporters and already the main source of wheat for many developing countries. A Russian invasion of Ukraine would smash its agricultural sector, with the shock waves rippling out across the world.
Agricultural reforms and the development of the business has been one of the few bright spots in the economy in recent years and the export of grain has become the largest source of foreign exchange earnings for the budget.
The country has been enjoying bumper harvests in recent years and Ukraine set a new record harvest in 2021 for the fourth year in a row in 2021.
Ukraine exported $27.9bn worth
of agricultural products in 2021, almost a quarter more than the previous record $22.4bn set the year before in 2020, according to the Institute of Agrarian Economics.
At the same time, in 2021, the share
of agricultural products as a percentage of total Ukrainian exports decreased from 45% in 2020 to 41%, partly thanks to soaring commodity prices, especially metal, while grain exports maintained their record-breaking growth rate.
Agriculture Minister Roman Leshchenko said in December the country harvested a record 84mn tonnes of grain in clean weight in 2021, up from 65mn tonnes in 2020.
Of the total grain output, Ukraine exported roughly 18mn tonnes
of wheat out of a total harvest of
24mn tonnes in 2020, making it the world’s fifth-largest exporter.
And this year will be even better. Ukraine has exported 33.2mn tonnes of grain so far in the 2021/22 July- June season, up 25.7% from the
same stage a season earlier, Ukraine’s Agriculture Ministry data showed as of the start of January, reports Reuters.
The ministry said the 2021/22 exports are on track to include 24.5mn
tonnes of wheat this year, allowing exports at the end of the agricultural marketing year in June to be even bigger than in the last two years.
“The country has been enjoying bumper harvests in recent years and Ukraine set
a new record harvest in 2021 for the fourth year in a row.”
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