Fears that conflict in Russia and Ukraine might reduce commodity exports and crop production from the Black Sea region are largely unfounded—at least for now. That’s according to Vince Peterson, vice president of overseas operations, U.S. Wheat Associates.
One example of the region’s healthy exports: One of its major wheat customers, Egypt, continues to get orders filled. Egypt is among the world’s largest wheat importers, bringing roughly 10 million tons of the crop into its ports annually.
"Certainly there was some hesitation, and early on in the conflict, if you go back into early February there was some discussion of risk premiums or hesitancy to sell, that kind of thing may be clouding the market a little bit," Peterson tells AgriTalk guest host Chip Flory. "… Since this has happened in the last two months, the Egyptians have purchased about 600,000 tons of Black Sea wheat. About 500,000 tons of that is Russian wheat. So the Russian ports are selling, the exporters are selling, that’s moving along."
Another example of strength is corn exports out of Ukraine, which increased to 4.7 million tons in February and March this year compared to just 2.9 million tons during the same period a year ago, Peterson adds.
Nonetheless, people in the Middle East have reason to remain cautious about the future given the history of unrest in the Black Sea region.
"Three out of the last five years, there has been some problem in Russia or the Black Sea area with some sort of government intervention that’s reduced exports," Peterson explains. "So there’s always a little bit in the back of the minds over there that will give them a small hesitancy."
Click the play button below to hear the complete AgriTalk interview with Peterson, including his thoughts on the health of Ukraine crops including winter wheat, corn and soybeans:
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