by PressEuropean Union will increase grain exports to improve the situation on the world market
Grain exports from the EU will partially compensate for the deficit
Europe is experiencing a serious geopolitical conflict, which has already caused a food crisis in a number of countries. The fact is that the confrontation has affected two major agricultural exporters, which account for more than 30% of wheat supplies and more than 50% of corn and sunflower oil sales.
To reduce the shortage of important products on the world market, the European Union decided to increase grain exports by 30%. According to experts, this will improve the situation with the availability of crops and provide an opportunity to partially compensate for the lack of strategically important products until the conflict situation is resolved.
At the same time, analysts make a good forecast for grain and oilseed crops in the EU. The weather is conducive to the development of sprouts, the sowing campaign was carried out on schedule. In addition, demand for feed is expected to decrease by 1.1%, which increased to a record high as a result of the crisis in the Chinese pig sector. In addition, demand for grains from biofuel producers is also expected to decline by about 8%. Thus, the export of crops from the EU may grow by 30%, as compared with the figures of the past 5 years. At the same time, grain imports may decrease by 42%.
Despite the increase in supplies, the decline in exports from one of the world’s largest producers is a serious problem for global food security. The global market is expected to lose about 20 million tons of supplies, which will contribute to further price increases. The cost of crops has been rising since March 2022, and this trend will continue in 2023.
It should be noted that the EU countries almost completely supply the domestic market, but they do not yet have the ability to compensate for the shortage of sunflower oil. The lack of this product causes concern among European buyers. Last year, sunflower stocks were at a high level, also due to a good harvest and the expansion of cultivation areas in Kazakhstan, China, and Turkey. However, over time, the problem may worsen, and large consumers are already looking for options for new supplies. Experts estimate the reduction in imports of sunflower products in the EU at 45%. The cost of seeds is now at a record level, and so far there is no indication that it will decrease in the near future.
Fearing the deterioration of the situation, a number of countries have imposed restrictions on the export of crops. Among them was Kazakhstan, which stopped supplying wheat and flour for several months. Last season was not very successful for local farmers, drought reduced grain and leguminous crops to 16.4 million tons, almost 4 million tons less than in the previous period.