As the US and its allies impose the toughest sanctions on Russia over its military operation in Ukraine, it may find relief in China after it announced that it was removing all restrictions on wheat import from Russia.
After the announcement, Australian prime minister Scott Morrison who had expected to gain from the conflict going on in Ukraine since Black Sea region where conflict accounts for 34% of global wheat supply, called it giving unacceptable “lifeline” to Russia in the middle of a period when they are invading another country.
Scott Morrison had hoped that Australia which had poor harvests this season and was suffering from China’s sanctions on agricultural produce will benefit from increased wheat and other grain prices as the conflict intensified in the black sea region but China may have cut his celebration short by removing all restrictions on wheat from Russia.
China imports around 50 to 60 million tonnes of grains per year largely for feed which have originally been supplied by South and North America but with the romoval of all restrictions on wheat from Russia, it may change the future flow of wheat globally as China starts to import more wheat from Russia.
Let me emphasize that even though China removed all restrictions on wheat from Russia, it may not prevent wheat and other grain prices from going up in a short period of time if war continues in Ukraine.
The war in Ukraine could see the disruptions of Canola since Ukarine is the third largest producer of canola in the world after Australia and Canada. This may cause shortages if the war continues.
Russia and Ukraine are also the largest producer and exporters of sunflowers seeds and sunflower oil in the world and if the war in Ukraine continues in addition to sanctions imposed on Russia by the US and its allies, the global supply chain will be hit hard and prices will skyrocket.
So countries like Australia and those in South and North America which are major producers of gain may benefit from the ongoing war in Ukraine amid global supply shortages of grains.
