Ukraine May Limit Wheat Exports

The Ukrainian government will consider the possibility of limiting wheat exports. The corresponding decision can be made as early as January 2022. Exports are expected to be limited for at least six months – until July 2022.

This measure is necessary to prevent a significant increase in prices for milling wheat on the domestic markets. Government officials are concerned about a possible rise in prices due to excessive exports, which in turn will lead to higher prices for bread. In 2021, the demand for milling wheat from Ukraine increased significantly as the main competitor in the market, Russia, introduced an export tax. The reasons are similar; the Russian Federation tries to protect the local market from excessive exports due to higher domestic prices.

Due to a possible restriction of wheat supplies from Ukraine, a serious increase in prices for cereals and bread is expected throughout the world. In addition to export restrictions, the food price is also affected by the COVID-19 pandemic. A report released by the UN says that the cost of food in the world has peaked in 10 years.

During the 2021/22 trading season, Ukraine has already exported 15.6 million tons of wheat, which is almost 30% more than last year. There are no more than 10 million tons of reserve left for export, of which only 4 million tons is milling wheat, the rest is fodder. Exceeding these limits will lead to an increase in the price of bread on the domestic market. Hence, the likelihood of export restrictions is very high.