Market anticipates tight ag commodities supply on escalating tensions between Russia and Ukraine

Escalating tensions between the world's largest crop exporters, Russia and Ukraine, are likely to prompt importers of wheat, corn and vegetable oil to seek alternative sources of supply, boosting global food prices already near multi-year highs, analysts and traders said.

As reported by Refinitiv Agriculture, global stock markets tumbled and crude oil soared to USD 97 a barrel on Tuesday, Feb. 22, as Europe's eastern flank edged towards war after Russian President Vladimir Putin ordered the deployment of troops into two eastern regions of Ukraine not controlled by Kyiv.

Related: What if War Starts Tomorrow. Agriproducers, Port Operators and Traders on High Alert in Ukraine

Since the two countries account for about 29% of global wheat exports, 19% of global corn shipments and 80% of global vegetable oil supply, traders fear that any kind of military intervention could affect commodity shipments and force importers to consider alternative sources of supply.

According to Refinitiv, about 70% of Russia's wheat exports in 2021 were shipped to buyers in the Middle East and Africa.

Previously reported that wheat and corn futures jumped 2% and 1.5% today, February 22.

Wheat export from Ukraine since the start of 2021/22 has come to 17.85 mln t, 34% up YoY. In the current season, wheat supply from Ukraine is limited to 23.5 mln t.

Learn more: TOP 10 Importing Countries of Ukrainian Grain in 2020

The projection for wheat export from Ukraine in 2021/22 was cut by 0.2 mln t to 24 mln t by the USDA in its February report.