Two senior economists at the International Food Policy Research Institute said Tuesday that six months after Russia’s invasion of Ukraine, the continuing uncertainties in the Black Sea region lead to questions about next year’s crop sizes.
While grain – mainly wheat, barley, and corn – is being shipped from Ukraine, the size of the shipments is only about 30% of prewar levels, Joe Glauber, a senior research fellow in the IFPRI Markets Trade and Institutions Division, said. That has led to storage problems, while the higher cost of shipping has led to lower grain prices in Ukraine, which raises the question of how much farmers will be able to afford to plant this fall for harvest next year, he added.
The Black Sea agreement among Russia, Türkiye, and the United Nations that allows the grain to leave Ukraine “has always been tenuous,” Glauber said, and it is still “fraught with tension” because Russia has been critical of it.
David LaBorde, also a senior research fellow in the IFPRI Markets Trade and Institutions Division, said that there is a theory in agricultural economics that the remedy for high prices is high prices because they lead farmers to plant more. But in the current situation, input costs have gone up, so the real question is profitability.
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