Analysts estimate the potential shift in supply at approximately 15 million metric tons of wheat and 7–8 million metric tons of corn. Thus, the total volume of grain for which demand may shift to alternative suppliers amounts to 22–23 million metric tons, according to Market Screener.
The EU could be the first choice for importers due to its geographical proximity to the Black Sea region. However, drought and deteriorating harvest prospects limit European countries’ ability to supply the market with the necessary additional volumes of wheat.
Among other potential suppliers, AgResource highlights Argentina and Australia; however, their new harvests will not reach the global market immediately. Argentina expects its new harvest in November, while new grain from Australia will become available for export in late October or November. This creates a temporary gap during which it will be particularly difficult to replace Black Sea supplies.
Increased risks to supplies from Ukraine and Russia are already being reflected in global prices. On August 27, December wheat futures in Chicago rose 1.7% to $7.60¾ per bushel, reaching a three-year high. The market is pricing in the risk of further disruptions to Black Sea exports and the need to find alternative sources of grain.
