George Simion, leader of Romania's far-right AUR party, who won the first round of the presidential election with nearly 40% of the vote, reiterated that if elected, he would oppose any further assistance to Ukraine and shift Romania’s focus inward.
Russian President Vladimir Putin and Chinese President Xi Jinping hailed their countries' relationship on May 8, vowing to increase cooperation in all areas, including military ties.
"There is Turkey, which maintains channels of communication. And then, above all, there is the People's Republic of China, which, more than anyone else, has the means to make (Russian President Vladimir) Putin come to the negotiating table and soften his demands," Polish Foreign Minister Radoslaw Sikorski said on May 8.
The United States will be ready to "walk away" from the negotiating table if it does not see Russia making progress in negotiation to end the war, U.S. Vice President JD Vance told Fox News on May 8.
Slovak Prime Minister Robert Fico arrived in Moscow on May 9 to celebrate Victory Day, commemorating the 80th anniversary of the defeat of Nazi Germany in World War II.
US President Donald Trump on May 8 called for a "30-day unconditional ceasefire" between Ukraine and Russia. Writing on Truth Social, Trump expressed his hope for "an acceptable ceasefire," with both countries "held accountable for respecting the sanctity of... direct negotiations."
President Volodymyr Zelensky had a "constructive" phone call with United States President Donald Trump on May 8, discussing the war, continued pressure on Russia, and a potential ceasefire.
The survey, conducted between April 24 and May 4, shows that 56.9% of respondents would not be willing to compromise on either territorial integrity or Ukraine’s pro-Western direction in any potential talks with Moscow.
U.S. Cardinal Robert Prevost was elected the new pope and leader of the Roman Catholic Church on Thursday, taking the name Pope Leo XIV, a senior cardinal announced on May 8 to crowds gathered in St. Peter’s Square, according to Vatican News.
A combine harvester harvest wheat in a field in Ukraine. (stanvpetersen/Pixabay)
News on potential disruption in grain exports from the Black Sea region, primarily from Ukraine, due to the full-scale military aggression of Russia against Ukraine, caused a significant price spike and raised concerns about global food security. Reduced grain supply from Ukraine will generate inflationary pressures, elevating the global price of grainand causing shipping problems, even though missing exports from Ukraine can be partially offset.
Disruption of grain supplies from the Black Sea region, mainly from Ukraine, threatens global food security. Shortages of cereals can worsen nutritional intake and living standards of more than 5% of the world population. Developing countries in the MENA region are particularly vulnerable to increases in the prices of grains and their reduced physical availability.
Russia’s full-scale invasion of Ukraine caused another price spike and triggered bouts of volatility in the global grain market, which is still grappling with the consequences of the COVID-19 pandemic. In just two weeks (from February 24 to March 11), prices of wheat and corn increased by 24.4% and 11.8%, respectively, amid fears that exports from the Black Sea region could come to a halt.
Ukraine plays a notable role in global food security. It is one of the ten largest exporters of selected grains (despite its relatively small share in global production), which accounted for about 9.5% of total wheat and 14.4% of corn exports in 2016-2020. While the largest corn importers, such as China and the EU, can cover more than 80% of their consumption with domestic production, smaller countries might face significant challenges.
Some countries in Africa, Asia, and the Middle East rely heavily on grain from Ukraine. Over the past five years, Ukrainian wheat amounted to over 20% of the total imports of Tunisia, Libya, Lebanon, Thailand, Bangladesh, and also Egypt and Indonesia, which are large wheat importers. In turn, Israel, Tunisia, and Libya have been buying from Ukraine more than 50% of their corn, while Egypt – almost 30%. Hence, these countries are vulnerable to a standstill in deliveries of Ukrainian grain, as well as to rising grain prices on the global market, given lower purchasing power of the population of most of these countries.
While Ukraine closed its ports on Feb. 24, it does not imply that exports in the current 2021/22 marketing year (MY) are lost completely. As of Feb. 23, Ukraine has already exported about 75% of wheat (18 million tons) and 57% of corn (19 million tons) volumes, projected by the USDA in February before the outbreak of war. Since exports can continue to a certain extent, the USDA only partially revised its forecasts of Ukrainian wheat exports down to 20.0 million tons (-17% compared with the previous forecast), corn – to 27.5 million tons (-18%). In addition, Australia and India can ramp up wheat deliveries to record levels to offset part of lost grain supplies from the Black Sea region. As for corn, Brazil and Argentina are expected to have record harvests in the current MY, but those will only be available to the market in several months. The U.S., the world’s largest producer and exporter of corn, now has sufficient stocks to fill the gap. Meanwhile, price-sensitive buyers in the MENA region may defer grain purchases at high prices and choose to release stocks that are insufficient to cover lower imports from Ukraine in full.
Market participants also share concerns about the next marketing year. Winter wheat, which is dominant in Ukraine (usually covers more than 95% of the area), has already been sown. Still, farmers’ ability to complete fieldworks – be it application of fertilizers, pesticides, etc. – on time is vital to maximizing yield potential. Limited access to fields in regions of active hostilities, lack or high cost of fertilizers and fuel may adversely affect the future harvest. Moreover, Canada is the only large wheat producer, which grows mainly spring crops, so overall, wheat for the next MY has already been sown, and global production can barely be increased. Besides, ending stocks of leading exporters (excluding Ukraine and Russia) at the end of the current MY are expected to be the lowest since 2007/08 MY and only 2.3 times higher than the average exports from Ukraine over the past five years. In contrast, the sowing of corn in Ukraine and other countries has either not started yet or is at its early stages, so there is room to expand the sowing area in other countries. However, the rapid increase in wheat prices will create additional demand for corn (as feed).
Grain prices are set to remain at record highs because of the lower participation of Ukraine in the global grain market and sanctions against Russia, even though a decline in Ukrainian exports can be partially offset by other countries. We developed three scenarios of price increases in the current and next trade years, using regression analysis and global cereal balance sheets. These scenarios assume a reduction in Ukraine’s exports and production by 100%, 50%, and 25%.
If the global market runs short of Ukrainian corn, it may cause only a moderate price increase (+41% in thecurrent trading year and +1.5% in the next), given greater scope to ramp up exports from South America and the United States, while wheat is likely to be more affected.
If supplies from Ukraine are unavailable in the market, the average price of wheat may increase by 68% this trade year, mostly in second quarter of 2022 as this MY harvest earmarked for exports is exhausted, and by another 14% next year. Higher production costs, primarily fertilizers (where Russia is an important market player) and fuels, will provide additional support to prices.
Even in the case of partial reduction (by 25%) in Ukrainian exports, wheat prices could rise by 59% and 11% in the current and next trade years, respectively.
Under such circumstances, some countries, primarily those relying heavily on grain imports from the Black Sea region, might face grain shortages and issues with supply chain management. In turn, this will push domestic food prices in these countries upward, prompting governments to release relatively small grain reserves or to subsidize imports, this way widening the fiscal deficit and thereby reducing the financial sustainability in the medium term.
Global food security concern is an additional argument for the world to stop the war in Ukraine.
