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Historical weather in Serbia

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The fragile global food market is still fluctuating.

After the outbreak of the Russian-Ukrainian conflict, the grain market, led by wheat, fluctuated greatly and the price rose sharply. The price of wheat reached a record high in early March.

As the market digested the impact of the conflict, the trend of the subsequent grain market eased, but the overall situation remained high.

Previously, there was a view in the market that with the continuous digestion of the market's influence on geopolitical conflicts, global energy and food prices will usher in a decline.

However, as we have analyzed before, there are many factors that lead to the rise of global food prices, and geopolitical conflicts are not the main reasons. Therefore, as time goes on, food prices have not ushered in a decline. On the contrary, with the continuous tightening of food policies in many countries, food prices are still rising.

Up to now, according to the report of Chicago Board of Trade, the highest increase of wheat price this year has exceeded 70%, and it is still on the rise.

1, many countries have tightened their grain exports.

Since the outbreak of the conflict between Russia and Ukraine, according to relevant statistics, more than 20 countries have tightened their food exports, and food protectionism is on the rise.

First of all, Russia and Ukraine are big grain exporters, and their wheat exports account for about 29% of global wheat exports, while corn accounts for 19%.

After the conflict broke out, due to the closure of relevant ports, a large number of grain transportation was blocked, so the market was turbulent.

Because Russia and Ukraine are big wheat exporters, and there are not a few countries in the world that rely on their exports, with the outbreak of conflicts, transportation is blocked, which makes many countries start to seek new food sources.

India, which was originally the second largest wheat producer in the world, said earlier that it would greatly increase wheat exports to ease the tight supply and demand of global wheat. However, due to the extremely hot weather in India in March, India subsequently announced the wheat export ban.

To make matters worse, in addition to the above-mentioned major wheat producing countries, Kazakhstan, Moldova, Serbia and other countries have also started wheat export bans.

In addition to wheat, many countries have imposed export restrictions on grain, vegetable oil, meat and fertilizer to varying degrees, which undoubtedly makes the global grain market more fragile.

2. Many countries "give a green light" for genetic modification.

With the continuous shortage of global food supply and demand, food protectionism has intensified, and extreme weather is still raging around the world. In order to ensure their own food security, in addition to tightening exports and increasing reserves, some countries have begun new attempts.

For example, in May this year, Argentina's "El Pais" reported that the country had issued a resolution to approve the commercialization of HB4 genetically modified wheat varieties developed by Bioceres nationwide, becoming the first country in the world to approve the cultivation of genetically modified wheat.

This variety was first discovered in sunflower by the National Science and Technology Research Council of Argentina, which can make transgenic wheat still have high yield under drought conditions and have resistance to the herbicide glufosinate.

Also last month, food regulators in Australia and New Zealand approved the sale of imported foods made of genetically modified wheat, including bread, flour, biscuits and other baked goods.

Recently, Brazil said that its National Crop Research Institute is cooperating with Argentine biotechnology company to start planting transgenic wheat in the experimental field near Brasilia in the central and western part of Celado region, and will report the growth of transgenic wheat in August.

In fact, GM wheat has been generally opposed by consumers before it was planted in Brazil, because wheat is a staple food and is directly eaten by people, so it is very cautious.

However, a recent survey shows that more than 70% consumers in Brazil are willing to accept genetically modified wheat, which may have a lot to do with the current tight global food supply.

3. Evolution of global wheat supply and demand

There are all kinds of news about the changes in the global wheat supply pattern in the second half of the year.

First of all, Ukraine, as a major wheat exporter, is expected to see a sharp decline in wheat production and export volume due to the decline in sowing and harvest.

Secondly, the "double killing of drought and flood" of American wheat once caused serious concern in the market.

However, the planting progress of spring wheat in the United States has been greatly improved recently, which has eased the anxiety. However, the expected yield reduction of winter wheat has been increasing, making the United States wheat still mixed.

Third, the European Commission recently raised the expected output of soft wheat in 2022/23, but lowered its export forecast.

On the other hand, there is good news.

For example, Australia's wheat production is expected to be close to the record for the third consecutive year, while Russia previously said that due to favorable weather, Russian wheat will reach a record 85 million tons this year, while wheat exports are expected to increase to nearly 50 million tons.

However, this does not mean that the wheat market can be fully alleviated. Due to the global high inflation, high freight rates and transportation obstacles, it is difficult for the "high temperature" of the grain market to drop rapidly.

For more information, welcome to collect the New Concept of Agriculture and learn about the new development of agriculture, countryside and farmers in the new era.