The war in Ukraine is expected to expand wheat production in Argentina and Brazil, the primary wheat-producing nations in South America. Both nations will likely already increase wheat planting this season, which begins in May 2022.
The high price of wheat after a significant shock to agricultural commodity markets caused by the Russian invasion of Ukraine is undoubtedly an incentive for increased planting of wheat in Argentina and Brazil, as well in the United States (see farmdoc daily March 29, 2022). However, high input prices, in particular the price of fertilizer, could partially offset the incentives for increased planting of wheat in South America.
Wheat: World Markets and Trade
Ukraine accounts for 10% of global wheat exports, and Russia 16% in the marketing year 2021/22, which began in July. The majority of Ukraine’s exports are shipped in the first few months of the marketing year. The closure of Ukrainian ports is limiting additional exports. Meanwhile, India and Australia are expected to increase exports to record levels since both have record crops and competitive prices (USDA, 2022). Global export and import volumes for wheat in 2021 are reported for the principal wheat-producing countries in Figure 1.
Argentina is the primary South American producer and exporter of wheat, accounting for about 7% of the global exports. Brazil, in contrast, is a prominent importer, mainly from Argentina (75%), followed by the United States (10%), and 15% from Paraguay, Russia, Uruguay, and Canada. The ongoing conflict in Ukraine has caused wheat supply and food security concerns for many major wheat importers that depend on Black Sea supplies. In this case, South American producers may increase supply to African countries. Argentina already has increased exports to Africa. Australia exports wheat to Southeast Asia, while Canada and the United States serve the European market.