Where will the spike in wheat prices stop? The question is on everyone’s lips, as the golden grain breaks historical records day after day. “Today, on the Euronext marketplace, a ton of wheat delivered to Rouen is trading at 412 euros and that delivered to La Pallice at 440 euros. It’s delirium! », comments Eric Thirouin, president of the General Association of Wheat Producers (AGPB). Same crazy surge in cereal prices across the Atlantic.
Tuesday, March 8, in session, the bushel of wheat touched an all-time high of 13.63 dollars, before falling back to 12.80 dollars. An increase of 70% since the beginning of the year.
Stocks blocked in Russian and Ukrainian ports
Since the invasion of Ukraine orchestrated by Vladimir Putin by Russian troops, investors have been trying to anticipate the consequences of this war on the highly strategic world wheat market. Concretely, maritime flows carrying goods from Ukraine are at a standstill. And the situation in Russian ports is hardly smoother. “We have stock in the port of Odessa, but we cannot fulfill orders. Like that of Algeria, which asked us for 90,000 tonnes of Ukrainian wheat,” explains Thierry Blandinières, managing director of the union of cooperatives InVivo, which recently bought the cereal group Soufflet based in Ukraine. He specifies that the wheat stocks on site are well protected.
Ukraine, the world’s fourth largest exporter this year, with a total of 24 million tonnes, would have nearly 6 million tonnes of wheat still to be sold and for the moment blocked. As for Russia, it should retain its title as the world’s leading exporter with 35 million tonnes, of which there are still 8 to be sold. Key positions in the global game of trade in the precious cereal, shaken by the crisis in Ukraine. “The situation is all the more tense as we are at the end of the campaign and there are 14 million tonnes of wheat to be loaded in these two countries”, emphasizes Philippe Chalmin, professor at Paris-Dauphine University.
A risk of food crisis in fragile countries
Faced with this sudden halt in exports, importing countries are on their toes. In particular Egypt, the world’s largest buyer of wheat with a volume of nearly 12 million tonnes. Or Algeria with 8 million tons. But also Tunisia and Morocco. “Egypt still has three or four months of stock”, estimates Jean-François Loiseau, president of the French cereal interprofession, Intercéreales. These countries around the Mediterranean have become very dependent on Russia and Ukraine. For Cairo, this represents 80% of its supplies, even if it has tried to diversify its sources by turning to Romania in 2021. Even Algeria, France’s historic trading partner, snubbed tricolor wheat, preferring it its Russian or Ukrainian counterpart, on the pretext of modified specifications. The French cereal sector, with an estimated stock of 3.5 million tonnes, is ready to take advantage of this market context.
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