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WAR HAS IMPLICATIONS FOR GLOBAL GRAIN TRADE
Stephen K Wegren
Its invasion of Ukraine has imperilled Russia's plans for increased grain yields and higher-value exports. Since 2014 Russia has pursued two primary goals in its food policy. Domestically, it has strived for food security through import substitution and self-sufficiency in several basic commodities. Internationally, it has strived to increase the value and volume of its food exports, especially wheat and other grains. The war in Ukraine threatens both goals. Russia had already started its sowing campaign in the south before the war. In 2021 it planted 80.4 million hectares, and it intended to plant 81.3 million hectares in 2022, 29.5 million of which would be occupied by wheat. After the invasion of Ukraine, the Russian government allocated 25 billion roubles in subsidised credit to facilitate a successful sowing season, in
addition to an original 28 billion roubles in short-term credit. In 2021 Russia produced 121 million tonnes of grain, including 76 million tonnes of wheat. Before the war, Russia's 2022 harvest was estimated at 125 million to 130 million tonnes, including 80 million to 83 million tonnes of wheat. Once the war began, those estimates were lowered to 121 million to 123 million tonnes, including 76 million tonnes of wheat.
Economic Union, where phytosanitary violations have occurred. The world's largest producer of agricultural machinery, John Deere, has pulled out of the Russian market. This means previously purchased machinery will not be serviced and spare parts will not be available to Russian farmers. The precipitous decline in the value of the Russian rouble against the US dollar will make the purchase of Western agricultural machinery from third-party sellers prohibitively expensive. Several large fast-food compa-
Although Russia's 2022 early sowing campaign appears to be going well, future sowing seasons may be affected by a seed deficit. Russia has devoted resources to improving its own production of high-yield seed in recent years, but historically it has imported about half its seeds, mostly from the West. In March 2022 Russia decided to allow seed imports from 11 warwick@rfsteelbuildings.com.au countries previously subject Eto import restrictions. These countries are primarily in the Eurasian
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nies have withdrawn from the Russian market. The closure of 850 McDonald's restaurants in Russia made headlines, but the withdrawal of Pizza Hut and Burger King was also important because a significant portion of the population frequently eats at fast-food outlets. One survey showed that 50 percent of the 1600 respondents aged under the age of 30 ate fast food every day. Some people in Russia argue that Russian fast food can replace Western restaurants, but this author's observations indicated Continued page 8...
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