Policy Backgrounders

Global Food Security: Ukrainian Grain Exports and Global Wheat Production

November 17, 2023

This serves as an update to our Policy Backgrounder “Global Food Prices and Inflation,” reporting on CED’s Trustee Roundtable with Professor Edwin Price, Department of Agricultural Economics, Texas A&M University and including CED Trustees David Smith, Chief Executive Officer, Associated Wholesale Grocers; Jason Potter, Chief Executive Officer, Fresh Market; and Laura Karet, Former Chair and CEO, Giant Eagle, Inc. 

Geoeconomic risks and severe weather have kept wheat prices volatile. Effects from an expected El Niño season and the escalation of tensions between Russia and Ukraine in the Black Sea have deeply impacted wheat markets this year. According to USDA’s November 2023 World Agricultural Production report, global wheat production for marketing year (MY) 2023/24 is projected at 781.98 million metric tons (mmt), down 0.95 percent from the previous year. Global wheat yield is projected at 3.51 metric tons per hectare (t/ha), down from 3.58 t/ha in 2022/23

In the absence of a renewed Black Sea Grain Initiative, Ukraine has been exporting its wheat from the ports of Reni and Izmail on the Danube River. Ukraine and Romania in August signed an agreement to work together to boost export of Ukrainian grain bound for African and Asian markets through Romania and onwards to Turkey.

• According to USDA’s November 2023 Grain: World Markets and Trade report, Ukraine has exported 4.8 million tons of wheat by all routes so far during the current marketing year (July/June), down 500,000 tons from the same period last year.
• The cost of insurance against military risks for exporters of all products from Ukraine remains a severe challenge. To make the Black Sea corridor more accessible to exporters, Ukraine and Britain agreed Tuesday on a special mechanism for discounts on war risk insurance on exports through the Black Sea corridor.    
• US wheat prices continue to be pressured by abundant competitor supplies and relatively slow export sales. The 2023/24 season-average farm price stands at $7.20 per bushel, down from $8.83 during the same period the year prior.
• US wheat imports are forecast at the highest level in six years. The current year’s high import forecast is driven by large imports from the EU. Drought conditions affected production of Hard Red Winter (HRW) wheat, motivating buyers to buy from nontraditional sources. EU growers, specifically Poland and Germany, typically produce high-protein wheat, which industry sources believe is intended to supplement US HRW for domestic milling use.