Background Retail
Ukraine's role growing in global grain market
A Russian invasion of Ukraine would be first and foremost a disaster for the people in the area and for the economy of the country itself. It would have few direct consequences for the energy supply in Europe. Russia is a major energy supplier, Ukraine is not at all. However, a raid would have major consequences for the global food market and food prices.
Would you like to continue reading this article?
Become a subscriber and get instant access
Choose the subscription that suits youMany countries have built up a growing dependence on Ukrainian products. The country has increasingly asserted itself as a major grain exporter, especially in recent years. In 2021 it was according to the Trade Data Monitor the fourth largest grain exporter, after the US, Argentina and India (and before Russia or Canada).
The main export products were maize, with an export value of €5,2 billion, and wheat and rye, with an export value of €4,5 billion. Interesting are not only the simple amounts, but also the growth rates of these amounts compared to 2020. Last year, only 21% of corn was exported than in 2020, while the export value of wheat and other grains had increased by as much as 41%. Exports of all grains together reached a value of €10,85 billion last year, which was almost a third more than in 2020.
Another major export flow is that of oilseeds (according to customs data these are animal and vegetable fats, but in practice this mainly concerns sunflower oil and to a lesser extent rapeseed). Of this, Ukraine exported around €6,3 billion in value last year. This was also almost a quarter more than in 2020. Ukrainian arable farming was doing well last year.
The main importer of Ukrainian grains, oils, fats and oilseed scrap was China, which imported around €3,6 billion (€2,2 billion grains, €850 million fats and €530 million oils and scrap). After China, Egypt, Turkey, Indonesia and Spain bought the largest volumes of grains. For no agricultural export market is Ukraine more than 50% dependent on one major buyer.
In addition to agricultural products, Ukraine is a major exporter of iron ore and steel. There are more than 50 locations across the country where iron ore is extracted. China is also the largest buyer for this.
Importance of open ports
It is of great importance for Ukrainian exports that the ports on the Black Sea remain open. Some of them are already partly controlled by Russia. Since the construction of a bridge between the Russian mainland and Crimea, the port cities on the Sea of Azov have been under de facto Russian control and this export route could easily be cut off.