Implications of Russia Ukraine conflict for Australian wheat
skip to content1
Just a heads up, our Internet and Mobile Banking will be offline for scheduled maintenance between 10:00 pm on Saturday, 28th of May to 6:00 am on Sunday, 29th of May 2022.
We apologise for any inconvenience. If you’d like to speak to us, we’re available Monday to Friday 6:00 am to 8:00 pm (AEST) on 1800 445 445.

We are experiencing some issues with the Rabobank Online Savings mobile app which means it is unavailable for some Apple users.

Rabobank commentary: Implications of Russia Ukraine conflict for Australian wheat

The Russia Ukraine conflict will have large ramifications for global and Australian grains and oilseeds markets, and particularly wheat, according to agribusiness banking specialist Rabobank.

The loss of access to all Black Sea wheat exports has not occurred in more than 100 years.

The Black Sea region accounts for 34 per cent of global wheat exports, and a full-scale conflict between Russia and Ukraine will see exports out of the region grind to a halt, at least in the short term, due to blockages to shipping and the high cost or lack of availability of insurance for vessels.

And if sanctions are implemented on Russian wheat exports, it will cause long-term structural changes to wheat flows.

Global wheat prices have already risen 21 per cent since February 1 this year and – in the very short term – prices could rise another five to 10 per cent. If conflict continues all the way into July, when the Black Sea harvest starts, and sanctions on Russia are implemented, global prices could rise another 61 per cent from current levels.


Australian wheat exports will experience increased demand if Black Sea exports are unavailable, though – while farmgate prices will benefit – they will likely not see the full upward impact of the global price rise due to Australia’s recent large harvest, limits on our export capacity and the positive grains outlook for the coming 2022 Australian season.

Assuming a full-scale conflict, with a virtual halt to Black Sea exports – and that basis (the difference between Australian and US wheat prices) remains constant – local Kwinana Free-In-Store APW prices could rise from A$367/tonne currently to A$425/tonne in the near term. And, if Black Sea wheat is unavailable by July, whether due to continued conflict or sanctions on Russian wheat exports, prices could rise significantly higher.

In order for Australian wheat prices to more closely follow higher global prices, Australia would need to increase our export capacity.

Trade flows

Assuming the Turkish Straits, the only passageway between the Black Sea and the Mediterranean, remain open, we could see governments in certain large importing nations, such as Iran or China, ignore western sanctions imposed on Russian exports, and still procure grain. In the short term, this would not prevent the expected high pricing, but would fundamentally change global wheat flows into the future.

Globally, the conflict could see both a change in trade flows and usage of wheat. Approximately 160 million metric tonnes of the world’s wheat (20 per cent) is used for feed and this is where substitution is likely to occur to compensate for a potential 60 million metric tonnes of wheat exports annually no longer coming out of the Black Sea region.

China’s hunger for 50 million to 60 million metric tonnes of grain imports annually, largely for feed, could potentially shift from its current origins of South and North America and instead be supplied by Russia’s 45 million to 50 million metric tonnes of grain export surplus.

What history shows

The last time the world lost access to all Black Sea wheat exports – in October 1914, during World War 1, when the Ottoman empire blockaded wheat supplies from Russia reaching allies, the UK and France – Chicago wholesale wheat prices rose 45 per cent from October 1914 to February 1915.

There are two main differences now that indicate the impacts on wheat markets could be more severe this time around. Firstly, the world’s reliance on Black Sea wheat is now higher and, secondly, wheat stocks in other (non-Black Sea) export regions are far lower compared with the average coming into this crisis than they were in October 1914. See attached Rabobank’s just-released report When Black Sea Wheat is Caught in Conflict

Other impacts

Apart from wheat, the Russia Ukraine conflict will also likely see disruptions to canola and feed markets, including barley. Ukraine is the third-largest exporter of canola in the world after Australia and Canada, while, together, Russia and Ukraine are the largest producers and exporters of sunflower seeds and sunflower oil.

On the feed side, the Ukraine crisis is also adding upward pressure to corn prices, with 15 million metric tonnes of Ukrainian corn (seven per cent of world trade) still left un-exported this season – a season when Ukraine was meant to account for 17 per cent of global corn exports. And if those supplies are unavailable, they will support Australian feed barley prices.

Dennis Voznesenski
Agricultural Analyst


Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of approximately 8.4 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.


Media contacts:

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or 0439 603 525

Will Banks
Media Relations Manager
Rabobank Australia
Phone: 0418 216 103