Uncertainty in the Wheat Markets

Uncertainty in the Wheat Markets

COVID-19 is reshaping the global food industry, with export giants such as Russia and Canada adapting to risks posed by the pandemic.

Grain production will likely be the least impacted by pandemic issues as it does not require a large workforce due to the high degree of mechanization, but some farmers worry that the outbreak will leave their businesses in jeopardy.

Russia has made shockwaves in the grain markets by restricting exports of wheat, meslin, rye, barley and corn strictly to member-states of the Eurasian Economic Union until July 1st, according to TASS. The remaining quota of 7 million tons of grain was quickly shipped to anxious importers attempting to pre-emptively bolster their strategic reserves in case of a food crisis. Russia reportedly chose to implement export restrictions to protect its own domestic food supplies, as social and economic difficulties continue to increase with the Coronavirus infection numbers. Although some expected higher grain prices following the export ban, grain prices have slowly decreased after an initial spike following Russia’s announcement on April 17th.

Canada has benefitted from the uncertainty in the Black Sea markets. Canadian farmers have noticed an increase in demand for food crops both due to nations wanting to increase their stockpiles and importers of Russian grain looking elsewhere during the country’s export ban. Exports of grain and oilseeds have increased, and the country is ready to accommodate even higher demand reports CBC.

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