• Balance sheet at the end of the 2021-2022 commercial year for the world grain market.
The balance sheet at the end of the 2021-2022 trading year for the world grain market clearly shows the extremely difficult period we are going through globally.
The world grain market has experienced unprecedented price fluctuations, record prices and costs. The price of wheat has doubled since the beginning of July 2021. On Matif scholarship from 200 euros/ton in July 2021, the price of wheat has currently reached almost 400 euros/ton.
Wheat price increases were driven by multiple factors. The drought, which severely affected the spring wheat harvest of Canada and the northern United States, caused their production to decrease by a third. The fall of 2021 brought gas and fertilizer price increases. But the major reason for these record prices was the armed conflict between Russia and Ukraine. In the first weeks after the outbreak of the war, prices rose sharply, since then there have been fluctuations depending on the news from Ukraine.
Forecast for grain prices
Uncertainty about the ongoing war makes it impossible to predict the fate of Ukrainian grain production and the possibility of its harvest. Added to this is the lack of storage space, given that there are still 18-20 million tons of grain in Ukraine, impossible to export through the still blocked ports.
For the September/October 2022 period, when the sunflower and corn harvest will begin, the problem of storage spaces will become acute, if the ports remain blocked. Export of Ukrainian grain is currently carried out through Romania and Poland, on land and on the Danube, but it is nowhere near a replacement solution for maritime transport. Thus the importance of unblocking the ports and the resumption of Ukrainian exports is overwhelming and with a decisive impact on the world grain price.
Dry spring worldwide
Analysts have already announced that the drought that affected the central and southern US states (Kansas, Texas, Oklahoma) in the spring has left its mark on the production of autumn wheat. Although southern Russia is also affected by drought, Russian analysts are optimistic about Russian wheat production this marketing year.
The European Union is also facing the drought, especially France, a major producer of wheat. On the other hand, an increased production of wheat is estimated for Australia, where the weather is predicted to be optimal, but the harvest period will not be until November 2022.
All these factors are not in a position to ensure a stable grain market, or to determine the reduction of prices, uncertainties are still the ones that govern the market trend at the global level and in terms of the new harvest.
Article written by Gabriela Dan, Editor of Arta Albă
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