The wheat market in the context of the Russo-Ukrainian war
Russia's war against Ukraine has had several implications for the international scene, the conflict that began in February 2022, according to the NATO Secretary General, could last for years. Ukraine, despite several losses, continues to achieve numerous victories against Russia. After the victory in Kiev, it was announced on June 19 of the same year that Ukraine had managed to stop Russian attacks in the east of the country, near the city of Severodonetsk.
Decline in wheat exports in Ukraine
Despite the territorial victory, Ukraine has had significant losses in the commercial sector, especially when it comes to exports. With the blockade of Ukrainian seaports by Russia, exports of 22 million tons of food products were held back, according to Ukrainian President Zelensky. Among these products, wheat stands out, since in peacetime Ukraine exported up to 6 million tons of grain per month, however, with the blockade, the volume was reduced to around 1 million tons in April.
Impact for Brazil: Exponential increase in wheat exports
According to the wheat sector specialist, Elcio Bento, for CNN Brasil, in view of the panorama of the Ukrainian situation regarding wheat, "[...] The European country is our competitor in these products, which opens an opportunity for Brazil in exports.” Brazil is one of the world's largest wheat importers and had a 1,745% increase in the number of exports of the product, compared to 2021, according to data presented by Canal Rural.
Because of the war, this number must increase even more to meet the global market demands for wheat. According to Diário Digital, the increase was 313%, reaching 2.3 million tons of the product, during the first four months of the year.
International consultancy being essential for entering the market
Thus, it is evident that because of the Russo-Ukrainian war, the international market has been and will be increasingly affected. With the reduction in wheat exports caused by the closure of Ukrainian sea ports, Brazil will become one of the main exporters of the product. Thus, the grain/wheat market will become increasingly relevant for export. Therefore, the ideal is the search for a qualified international consultancy, aiming at an effective insertion in the international market.
By: Luiza da Justa Berkovitz at 06/19/2022