03-03-2014 12:17 PM
Few words first about me.
I am the Editor-in-Chief of the "Agrobusiness-Ukraine" magazine. The web-site is: agrobusiness.com.ua though it is in Ukrainian.
I was trained by the ERS USDA in 1996-1997 as the Ag market analyst. So my principal interests are with the Ag policy, Ag makets and Ag economics.
You can see my first input to the Agriculture.com: http://www.agriculture.com/promotion/your-wld-in-a
I know that now everybody is concerned with what is going on in Ukraine, about the conflict with Russia and how all this mess may affect the world markets.
Let me give you a brief insight though events here change with the speed of light.
At the moment it is difficult to write about Ukraine, in general, and this year agricultural outlook, in particular. The turmoil in January-February evolved into the revolution that further had evolved into the occupation of the Crimean peninsula by the Russian army. Every moment the situation may change either for some stabilization or further escalation into a large-scale war between the biggest country in the world and the biggest country in Europe with absolutely unpredictable outcome but with predictable huge amount of casualties on both sides. Neither EU nor the USA will interfere in the war in case it started (let us be realistic). The worst outcome for Europe will be the break of oil and natural gas supply from Russia via Ukraine.
But there must be no illusion about the annexation of the Crimea by Russia. It is lost to Ukraine. Period.
So, the forecast of the Ukrainian production and export of the main crops this year must be analyzed from the points of two possible scenarios of the political development.
1. The situation eventually stabilizes. Since the Ukrainian farmers practically are prepared for the new season with the necessary volumes of inputs (fertilizers, pesticides, seeds, fuel) and the weather till now was highly favorable the production of the main crops (wheat, barley, corn, sunflower, rapeseed and soybeans) will be at least no less than in the previous year.
The current forecast for the crops is as follows: wheat – 21.5 mln tons, corn – 27-28 mln tons, barley – 8.5 mln tons with total volume of about 60 mln tons.
The forecast for the oilseeds production looks like: rapeseeds – 2-2.5 mln tons, sunflower - 11 mln tons, soybeans – 3 mln tons.
The corresponding exports look like: wheat – 10 mln tons, corn – 20 mln tons, barley – 3 mln tons with the total export of grain about 33-35 mln tons.
One of the biggest Ukrainian grain export terminals (throughput of up to 4 mln tons a year, or about 10 percent of the total Ukrainian export throughput) is located in Sevastopol in Crimea. Obviously this year it will not operate as well as some minor export terminals in the Azov sea). This may affect not only the grain export from Ukraine but also a grain export from Russia since part of its grain Russia exports using Ukrainian ports.
2. The situation escalates into a real war. In this case Ukrainian Black sea ports may be blocked by the Russian navy or even grabbed by the Russian army. The grain trade may also be paralyzed because foreign buyers may consider the grain import from this region as highly risky. The outcome will be disastrous both for the Ukrainian and Russian grain export as well as for the next year grain production. Right now the scale of the disaster is impossible to assess.
03-03-2014 02:04 PM
Here are a few pieces on the physical and military weaknesses of Putin's actions.
Granted, the physical situation is too remote for the US to have much affect militarily. But there is a curious action going on in the main naval base on the Crimia. The new admiral of the Ukrainian fleet defected but there are 3 Ukraine naval ships blocked in at the docks. They basically told the defecting admiral "Nuts!" when he asked them to surrender and are preparing for battle on the decks.
This situation is one trigger pull from a chain reaction and I'm getting the sense the longer this goes on the tougher it will be for Putin's plans to have a good outcome. So far military discipline has held on both sides but there will be a decision time for both soon and so far Ukraine isn't backing down.
03-03-2014 02:21 PM
This might also be an opportunity to educate the rest of us on what the "real people" in Ukraine think about what is happening, and what they would like to see for the eventual outcome, if that is possible.
Best of luck to all the farmers over there, regardless of the language they speak.
03-03-2014 02:43 PM
Thanks lurii - your perspective reminds us that real people with real families are at the mercy of other people's decisions.
We hope and pray for a peaceful resolution.
03-03-2014 03:27 PM - edited 03-03-2014 03:30 PM
If I understand history, prior to 1954 Crimea was part of the USSR, but was ceded to Ukraine (part of USSR at the time). Prior to that, it was part of many different empires. If it is correct that it is now "lost" to Ukraine (as lurri says) with this invasion, other than for the people living there, will the ramifications for the rest of the world change much? I'd like your thoughts on that lurii.
I realize this could be just the first of a series of new adventures Putin is embarking on, and if that is the case there will be a big impact on the rest of the world.
Imperialist Russia and its bully tactics are distasteful for us all. But in the big picture, I don't see much change unless this results in internatilonal military interventions or a further escalation into other parts of Europe . Am I missing something?
03-03-2014 04:01 PM
Does the Ukraine have a military? And what is its strength?
I have been led to believe that there is not much military in Ukraine. At least enough to deal with a conflict from that neighbor.