Trade Implications of Russia’s Invasion of Ukraine

The Russian invasion of Ukraine has impacted financial and energy markets, as well as agricultural markets, increasing price volatility for major commodities.  Russia and Ukraine are not major markets for US agricultural exports, ranking 56th and 80th, respectively.  Before 2014, when Russia invaded Crimea, US exports of agricultural products ranged between $1.2 to $1.7 billion annually.  Afterwards, US agricultural exports to Russia have been around $250 million annually, with animal products (e.g., beef, poultry) taking the largest hit (USDA, 2022).  Moreover, neither Russia nor Ukraine are major exporters of agricultural products to the US; the US ranks 55th and 53rd, respectively.  That said, both Russia and Ukraine are major players in the international wheat and corn markets.  In 2020, Russia was the largest wheat exporter reaching almost $8 billion, while Ukraine was fifth with almost $3.6 billion in wheat exports.  Moreover, Ukraine is the fourth largest corn exporter reaching almost $5 billion, while Russia is the 11th with $400 million in 2020 (UN Comtrade, 2022).  Since Russia and Ukraine’s marketing year ends at the end of May, the impacts of the Russian invasion on their wheat and corn exports this marketing year could be minimal. On the other hand, it is unknown the extent of infrastructure damage for hauling and shipping, or the impact of shipping restrictions in the Black Sea that could slow down or increase the cost of trade.  Finally, Russia accounts for 14 percent of the world’s nitrogenous fertilizer exports and is the leading supplier of urea to the US. Additionally, Russia and Belarus accounts for about 20 percent of US potash imports (USDA, 2022). The sanctions again Russia and Belarus (for supporting the Russian invasion) could hurt US agricultural producers as they are already experiencing record high fertilizer prices.

UN Comtrade (2022).
U.S. Department of Agriculture (USDA) (2022). Global Agricultural Trade System. Foreign Agricultural Service.

Figure 1. Top Wheat Exporting Countries: 2020

Source: United Nations Comtrade Database, 2022

Figure 2. Top Corn Exporting Countries: 2020

Source: United Nations Comtrade Database, 2022

Ribera, Luis, and Andrew Muhammad. “Trade Implications of Russia’s Invasion of Ukraine.” Southern Ag Today 2(11.4). March 10, 2022. Permalink