The repercussions of the end of Ukrainian grain exports on the farmers of Lot-et-Garonne

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The deal on the export of Ukrainian grains has ended, causing their prices to soar. However, farmers may not take full advantage of them.

On the night of Monday July 17 to Tuesday July 18, the agreement on the export of Ukrainian grains was concluded. Signed in Istanbul last July, this agreement allowed the safe exit of cereals through the Ukrainian ports on the Black Sea. Almost 33 million tons of crops were thus able to transit through this corridor, thus avoiding a possible food shortage. But now this agreement, which has already been extended twice since last summer, has not been renewed by Russia. A decision followed by an air strike on Odessa, the main export port. The end of this agreement has had consequences for world grain markets but also direct effects on our local farmers. “As soon as Russia made the decision, prices started to go up again,” says Vincent Rigo, a member of the Chamber of Agriculture 47 bureau and a grain grower near Marmande. A “welcome” evolution for the price of cereals which for the moment is estimated at around ten euros per tonne. Because the wheat harvest that just ended a few days ago remains “correct without being exceptional”. Some serious damage due to storms should also be reported in the department. “The market is currently around €225/t for wheat, we expect €250/t”, warns Vincent Rigo that he is not entirely enthusiastic about this situation.

A conflict that fuels uncertainty

The increase in cereals could continue and reach the levels hoped for by farmers, if the situation were to remain the same. “Certainly if Putin continues, it could be a good upward trend,” says the 47th Chamber of Agriculture member.
The end of this agreement therefore appears as an opportunity for the producers, who also do not want to “settle for the misfortunes of others”. But they may not be able to reap all the benefits. In fact, cereal producers are not in a position to wait for the end of the agreement to have a more attractive impact on the price of wheat. “We will be forced to sell the goods directly because we all need cash,” he explains. An immediate need for money that will make it possible to cover the very important expenses of this year which have jumped by 40%.
The conflict in Ukraine has not only had positive consequences for our grain farmers. “The war raised the cereals, but also the loads,” informs the cereal producer Marmandais.
This conflict will have mainly had the effect of highlighting the world’s scarce grain reserves. “We understood that inventories weren’t as high as some would have us believe,” he continues. Up until the war, these “large” reserves were used as an excuse to keep grain prices down. This is no longer the case and producers can be paid a fairer price. A small reward that the producers gladly accept.

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