BlackSeaGrain

Before Russia’s invasion in Ukraine, grain export sectors of Kazakhstan, Russia and Ukraine have developed dynamically. Not until 2000, all three countries became net exporters of grain (wheat, corn and barley).

Parallel to Russia's rise to become the world's largest wheat exporter, Ukraine advanced to the fourth largest corn exporter. Wheat exports by Kazakhstan have also grown but stabilized on a significantly lower level. However, Kazakhstan is one of the largest wheat flour exporters globally.

In the last years, total grain exports by Kazakhstan, Russia and Ukraine have exceeded 100 million tons annually. Roughly speaking, this corresponds with over a quarter of world grain export.

Russian wheat was mainly imported by countries in the Middle East and North Africa (MENA), with Egypt and Turkey being the main target markets. In recent years, Russia’s exports to wheat import markets of low-income countries e.g. in Sub-Saharan Africa, that are heavily dependent on food imports, have increased. Russia became the main supplier of wheat to African countries, accounting for 26% of Africa's total wheat imports (UN Comtrade, 2021). Thereby, the destinations of Russia's and Ukraine's wheat exports largely overlapped. Differently, Kazakhstan mainly exports wheat to neighbouring countries in the region, i.e. Uzbekistan, Tajikistan and Afghanistan.

Graphic: Grain net export by Kazakhstan, Russia, Ukraine and share in world grain export

In future, Russia’s wheat trade pattern can be expected to become more influenced by geopolitics. For example, grain exports to China might increase via the New Land Grain Corridor which is currently established from Ural, Siberia and the Far East region to China. Further, Russia has frequently restricted its wheat exports and the temporary export restrictions have been transformed into a permanent system of export taxes since 2021. Also, the Ruble has been losing value for over a year, which might be a signal of macroeconomic instability.

This project aims to empirically assess export growth, trade stability, pricing strategies and the influence of policies and recent changes in market conditions on the Russian wheat export business in the context of global food security. Econometric analyses will e.g. be conducted by applying gravity, trade duration and pricing models, embedded in Melitz's "New" New Trade Theory (NNTT) and focus on the role of firm differences and policies to explain trade relations. The project therefore expands the application of the NNTT towards trade of agricultural commodities and, at the same time, extends the Melitz approach to pure trading companies.

Project structure

• DFG (German Research Foundation)

Partners

• Prof. Dr. Martina Brockmeier, International Agricultural Trade and World Food Economics, University of Hohenheim, Stuttgart
• Prof. Dr. Sebastian Hess, Head of Department Agricultural Markets, University of Hohenheim, Stuttgart
• Dr. Mahdi Ghodsi, Economist, The Vienna Institute for International Economic Studies, Austria
• Prof. Dr. Munisamy Gopinath, Professor of Agricultural Marketing, Department of Agricultural and Applied Economics, University of Georgia, USA

Completed projects

Global Food Security and the Grain Markets in Russia, Ukraine and Kazakhstan (GERUKA)

The Global Food Crisis – Impact on Wheat Markets and Trade in the Caucasus and Central Asia and the Role of Kazakhstan, Russia and Ukraine (MATRACC)

Analysis of the strategy of the Russian Federation for the expansion of agricultural production (STARLAP)

Publications (selection)

Glauben, T. and M. Svanidze (2023). Globaler Agrarhandel: robustes Sicherheitsnetz zur Reduktion von Hungerrisiken in Krisenzeiten, Wirtschaftsdienst 103(7): 491-497.

Glauben, T. and M. Svanidze (2023). Global Agricultural Trade: Robust Safety Net to Reduce the Risk of Hunger, Global Food Journal, 08/2023.

Götz, L. and M. Svanidze (2023): Getreidehandel und Exportbeschränkungen während des Ukrainekriegs, Wirtschaftsdienst 103(13): 37-41.

Götz, L. (2023): The International Grain Trade and the War, ZOiS Spotlight 5/2023.

Jaghdani, T. J., Glauben, T., Prehn, S., Götz, L., & Svanidze, M. (2023): The stability of global wheat trade network in the post-Soviet era; trade duration approach. 63nd Annual Conference of German Association of Agricultural Economists (GEWISOLA), Göttingen, Germany.

Glauben, T., Svanidze, M., Götz, L., Prehn, S., Jaghdani, T., Duric, I. and L. Kuhn (2022): The war in Ukraine exposes supply tensions on global agricultural markets: Openness to global trade is needed to cope with the crisis, Intereconomics - Review of European Economic Policy, Vol. 57(3): 157-163.

Götz, L., M. Heigermoser and T. Jaghdani (2022): Russia’s Food Security and Impact on Agri-Food Trade, Chapter 4 in: Wegren, S. and F. Nilssen (ed.): Russia’s Role in the Contemporary International Agri-Food Trade System, Palgrave Advances in Bioeconomy: Economics and Policies Palgrave Macmillan.

Heigermoser, M., T.  Jaghdani and L. Götz (2022): Russia’s Agri-Food Trade with the Middle East and North Africa, Chapter 9 in: Wegren, S. and F. Nilssen (ed.): Russia’s Role in the Contemporary International Agri-Food Trade System, Palgrave Advances in Bioeconomy: Economics and Policies, Palgrave Macmillan.

Tleubayev, A.; Bobojonov, I.; Gagalyuk, T.; Glauben, T. (2022) Business group affiliation and financial performance in the agricultural sector of transition economies: The case of Russian agroholdings. Journal of East European Management Studies 27 (2): 280-310.

Čechura, L., & Jaghdani, T. J. (2021). Market Imperfections within the European Wheat Value Chain: The Case of France and the United Kingdom. Agriculture 2021, Vol. 11, Page 838, 11(9), 838.

Heigermoser, M., L. Götz and M. Svanidze (2021): Price formation within Egypt's wheat tender market: Implications for Black Sea exporters, Agricultural Economics 52(5): 819-831.

Svanidze, M., L. Götz and D. Serebrennikov (2021): The influence of the 2010/11 wheat export ban on spatial market integration and transaction costs of grain markets in Russia, Applied Economic Perspectives and Policy, 44(2):1083–1099.

Svanidze, M. and L. Götz (2020): Grain import dependency and food security in the South Caucasus, Caucasus Analytical Digest (117), Issue “Agriculture and Trade with Russia“: 15-20.

Tleubayev, A.; Bobojonov, I.; Gagalyuk, T.; Glauben, T. (2020): Board gender diversity and firm performance: evidence from the Russian agri-food industry. International Food and Agribusiness Management Review 23 (1): 35-53.

Svanidze, M., L. Götz, I. Duric and T. Glauben (2019): Food security and the functioning of wheat markets in Eurasia: A comparative price transmission analysis for the countries of Central Asia and the South Caucasus, Food Security 11(3): 733-752.

Uhl, K.; Perekhozhuk, O.; Glauben, T. (2019) Russian market power in international wheat exports: Evidence from a residual demand elasticity analysis. Journal of Agricultural & Food Industrial Organization 17 (2): 1-13.