As the second anniversary of the war in Ukraine approaches, a new research paper on the long-term impact of the war on global wheat prices and market reactions has come out, which paints an interesting picture.

The study, by researchers at the University of Illinois and Texas Tech University, found that despite an initial spike in prices in the first few months after the invasion, they have fallen sharply to date as other wheat-producing countries have compensated for reduced production and exports from Ukraine .

William Ridley, an assistant professor in the Illinois Department of Agricultural and Consumer Economics and co-author of the study, said he, like many others, believed in the weeks after the war began that prices would rise and remain relatively high for the foreseeable future.

“But prices quickly fell when it became clear that other wheat exporters could fill the gap. At the beginning of the war, 23 months ago, the price of wheat on the world market increased by 27%, mainly due to speculative purchases, but subsequently collapsed and is now only 2% more than its pre-invasion value.'

"At a time when Ukraine was not able to export much wheat from its Black Sea ports, other exporters, such as the US, Australia and Canada, quickly stepped in and were able to offset the required quantities in the market."

For the 2023-24 season, which runs from July to June, the US Department of Agriculture's Foreign Agricultural Service forecasts an 8 percent annual increase in corn exports to 29.2 million tons, a 3 percent increase in wheat exports, for 17, 7 million tons, a 22% increase in barley exports to 3.3 million tons, and a nearly 10-fold increase in rye exports to 170,000 tons. However, these amounts are well below the exports of pre-war Ukraine, which was traditionally a top 10 producer and exporter of wheat and corn.