Mediterranean Countries Lead Purchases Amid Export Decline

Ukraine’s wheat exports saw a significant drop of 40% in January 2024, with total shipments reaching 891,000 tonnes, compared to the same period last year. This decline was primarily driven by reduced demand from Asian markets, which traditionally import large volumes of Ukrainian grain. In contrast, Mediterranean countries emerged as the primary buyers, according to data from the Ukrainian Grain Association.

Key Buyers and Shifting Trade Patterns

Spain led the list of importers, purchasing 223,000 tonnes, followed by Algeria (196,000 tonnes), Egypt (156,000 tonnes), and Tunisia (74,000 tonnes). Spain, which was not a major buyer before, has significantly increased its wheat imports from Ukraine since Russia’s full-scale invasion in 2022. This shift is largely due to lower prices for Ukrainian wheat and the development of alternative logistics routes.

Meanwhile, Asian markets have scaled back their purchases. Vietnam remained in the top five buyers with 68,000 tonnes, while Bangladesh imported 54,000 tonnes. However, Indonesia, which was the second-largest buyer last year, has almost completely halted wheat imports from Ukraine. Analysts attribute this to rising competition from Australia and Russia, along with expectations of increased Indonesian demand later in 2024.

Domestic Consumption Decline and USDA Forecast

Ukraine’s domestic wheat consumption has also fallen sharply in 2024, dropping from 8 million tonnes to 6 million tonnes—a 25% decrease, according to the Ministry of Agrarian Policy. This lower domestic demand has further impacted the country’s overall wheat market dynamics.

The USDA’s latest forecast for the 2024/25 marketing year projects that Ukraine’s wheat harvest will remain stable compared to last year. However, exports are expected to decline by 0.5 million tonnes, or 5% of total output. Yet, the sharp drop in January exports alone—0.6 million tonnes less than the previous year—already surpasses the USDA’s annual forecast, signaling a potentially larger decline.

Future Challenges for Ukrainian Wheat Exports

The future of Ukraine’s wheat exports will largely depend on three key factors:

1. The evolution of logistics routes, as Ukraine seeks to expand trade corridors beyond traditional routes.
2. Increased global competition, especially from Russia and Australia, which are aggressively pricing their wheat in key markets.
3. Demand from traditional buyers, as shifting economic and political factors influence purchasing decisions.

To adapt, Ukrainian wheat producers will need to explore new markets and optimize their supply chain strategies to maintain export volumes in an increasingly competitive global market.





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