A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Russia and Ukraine are troublemakers in grain markets

October 15, 2012


The harvests are about over in Russia and Ukraine and the outlook is not promising. This year’s output is sharply down, due in part to this summer drought.

As of early October, Ukraine only harvested 34.8 million tons of grain, against 40 million tons for the previous year. In addition, Russia is expecting to harvest between 70 and 75 million tons for the full 2012-year, or 20 tons below last year’s volume. As far as exports are concerned, Moscow plans to ship between 10 and 24 million tons of wheat, against 27 million tons in 2011. For its part, Kiev intends to export 4 million tons of wheat in 2012, against 5.4 million tons last year.

Against this background, all eyes are on the least Russian or Ukrainian ukase that would look like one type or another of protectionist measure. Already affected by soaring prices in this fall of 2012, global agricultural markets are mostly concerned that Moscow might curb its exports, as it did in 2010 when the country suffered from an unprecedented drought, or that Kiev might increase export taxes, as was done in 2011.

Both recent members of the WTO (since 2008 and 2012 respectively), Ukraine and Russia seek to be reassuring and pledge not to impose any export restriction in the years ahead. Agriculture is now considered as a strategic added value by the two nations, which are seeking to become key suppliers to agricultural markets. Accordingly, Russia has, since July 2011, been conducting a strategy to regain its position in grain markets following the embargo decreed in the summer of 2010.

Yet since September, the signals sent in global markets appear to be contradictory. At the end of September, Ukraine announced it would limit its 2012/2013 exports to 19.4 million tons of grain, while Russia also announced that it would act accordingly if prices continue to rise on its domestic market, before denying the information.

As of October 23, Moscow is drawing 110,000 tons of grain from its intervention reserves, in order to support the 2012/2013-grain prices and stabilize its domestic market. But, just as in Ukraine, downgrading grain reserves is troublesome and brings about changes to the very structures of the global wheat market, leading to the fear of increased price volatility.

That being the case, structural measures must be rapidly adopted, not only by Russia and Ukraine but also by the whole international community, to better anticipate and regulate agricultural markets.
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Paris, 18 December 2018