Due to the ongoing drought in southeastern Europe, Russian and Ukrainian agriculture are facing difficulties. Russian farmers urgently need rain. So far, they have had to sow winter wheat in very dry soil in many areas. The situation in Ukraine is even more critical.
The Ukrainian Ministry of Economic Affairs states that farmers in most regions have not yet begun sowing winter wheat for the 2021 harvest because of the severe drought.
According to the Ukrainian agricultural company APK-Inform, there is no moisture in the soil, so sowing now is futile. Therefore, sowing in Ukraine will be very late this year and likely cover much less area.
The Ukrainian Ministry of Economic Affairs says that the winter wheat area will probably decrease from about 6.7 million hectares last year to 6.1 million this year. According to ministry data, as of September 28 farms had sown only 25 percent of the estimated area or 1.5 million hectares.
Recently, Russian wheat with 12.5 percent protein was shipped from ports on the Black Sea for US$233 per ton. This is a $2 decrease compared to the previous week. Compared to last week, wheat prices on the European futures market dropped by 3 euros. The reason is a moderate decline in Russian export prices.
The Russian Ministry of Agriculture has announced that the quota system for grain exports, which was in effect from April to June during the coronavirus outbreak, will continue despite this year’s large harvest. The ministry announced that the export quota for grain will remain applicable until June 2021.
However, the ministry has not provided further details about the size of the potential quota. According to information from the Reuters news agency, the quota for the period from January to June 2021 could be around 20 million tons of grain. Russia is the world’s largest wheat exporter, and this year it will likely have the second largest grain harvest since the record-breaking 2017.