Good news for Pakistan: Ukraine winter wheat sowing seen unchanged amid global food inflation crisis
Business
Most nations in Asia and Asia are worst hit by the hike in food prices
KYIV/LAHORE (Reuters/Web Desk) – Ukrainian farmers are not expected to reduce the area of winter wheat they sow for the 2024 harvest despite higher logistics costs due to the wartime export crisis, a senior farming official told Reuters on Tuesday.
Ukraine is a major wheat producer and the demise of the Black Sea corridor used to safely export grain during the war spurred speculation that farmers could sow less wheat because of shrinking profit margins due to costlier export routes.
This revelation is a welcoming sign for Pakistan and other cash-strapped nations, especially in Asia and Africa, which have been facing a severe cost of living crisis amid rising inflation, as they spending a huge chunk of foreign exchange on expensive wheat export.
Higher production in Ukraine will ensure reducing the chances any massive surge in wheat prices next year, indirectly allaying the fears causing the rush to buy the required stock among different countries, which boosts prices due to higher demand.
But one mustn’t forget that the wheat flour prices have skyrocketed since the harvesting of crop earlier this year which saw an increased production, which means a combination of hoarding and smuggling is manipulating the market at the cost of the people.
Meanwhile, the depreciation of rupee thanks to the conditions set by the International Monetary Fund (IMF) have made the imports expensive for Pakistan although the country is able to reduce trade deficit with a margin. But the paucity of foreign exchange means Pakistan needs even bigger cut.
Read more: IMF condition dragging Pakistan rupee down the slope with no stop in sight
The rising food prices/ food inflation has become the main challenge around the world as low-income groups even in the developed nations are finding it difficult to adjust their expenditure amid reduced purchasing power and no real wage growth.
As far as Pakistan is concerned, the record-high food inflation as well as inflated fuel and utility bills have made survival the sole priority of an overwhelming majority.
Read more: No more dreams as rich-poor divide widening at frightening pace
On Monday, Reuters says, Ukraine’s agriculture ministry quoted survey data as showing that farmers could indeed cut the area of winter wheat sowing, while increasing the area of winter rape for 2024 to a record high level.
However, First Deputy Agriculture Minister Taras Vysotskiy told Reuters on Tuesday that the possible reduction of winter wheat may total only 0.1 per cent.
An expected reduction in the overall winter grain sowing area would come at the expense of other grains, he said, forecasting a drop of 5.4pc in barley sowing this winter.
Ukraine sowed about 4.1 million hectares of winter wheat for the 2023 harvest, while the area under winter barley stood at around 615,000 hectares.
Ukraine is a traditional grower of winter wheat, which accounts for at least 95pc of the country's overall wheat output.
Farmers have already completed the 2023 wheat harvest, threshing 21.94 million metric tons. The harvest totalled 20.7 million tons in 2022.
The ministry has given no forecast for the total 2024 sowing area, but said the overall winter crop sowing area could rise by 0.5 million hectares, or 8pc, compared to the previous season.
Traders say an increase in the sowing area of winter crops, especially in winter oilseeds, could mean that farmers sow less spring grain crops, with corn and spring barley most likely to suffer.
Ukraine can currently export limited volumes through small river ports on the Danube and via its western land border with the European Union.
That forced local producers to adjust their sowing plans in 2023 and switched from grain crops to oilseeds, which are more expensive but produce less volume.
Ukraine already reduced its sowing area for corn in favour of sunflowers in 2023.
