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Black Sea grain is key for world markets

Черноморското зърно е ключово за световните пазари

In the past few months, Ukraine has exported more grain than expected, despite the country being at war with neighboring Russia.

This, combined with Russia's two record wheat harvests, has resulted in a huge surplus of Black Sea grain supplies over the past two seasons compared to originally forecast. "A surplus that could easily replace entire export programs of other leading suppliers," a Reuters report said.

The U.S. Department of Agriculture raised its forecast for wheat exports from Ukraine in the 2023-24 season for the fifth month in a row, and corn exports were raised for the second month in a row. The inflated forecasts are related to better export performance, not bigger harvests.

USDA's combined 2023-24 Ukraine maize and wheat export forecasts have risen 35% (10.5 million tonnes) since August, although production is up just 9% (4.4 million tonnes) . This is based on a return to near-normal export volumes relative to production, suggesting that Ukraine's export system has readjusted somewhat.

Ukraine produces significantly more grain than it uses domestically, so much of it is exported, which is a huge source of money for the country. In the five marketing years before the war, Ukraine exported an average of 79% of its annual corn crop and 67% of its wheat.

The USDA corn and wheat forecasts for 2023-24 assume respective export-to-production ratios of 83% and 68%, although these have been pegged to 68% and 49% in the past few months.

Russia is forecast to export a record 56% of its 2023-24 wheat crop, up from a five-year average of 48%.

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