KANSAS CITY, MISSOURI, US — As conflict continues between Russia and Ukraine, two of the world’s largest wheat exporters, it’s premature to say that the invasion will cause a change in grain flows, said Economist Dan Basse, president of AgResource Co., in an interview with World Grain. A lot will depend on the duration of the fighting.

 “Although I’d like to say we’ve got a change in world grain trading order, which is what your knee jerk reaction would be to this situation, we don’t know yet,” Basse said on Feb. 24.  “There’s a lot of moveable pieces yet that have yet to be decided.”

If Russia takes over Ukraine, which some intelligence sources are saying could happen in a week to 10 days, and establishes order, the impact on grain trade will be modest, he said.

“A lot of countries will just hold their breath and wait,” Basse said. “If the conflict looks like it could go into March and April, then it starts to shift some international trade flow.

“Even in the interim, there’s probably enough French wheat, and odds and ends elsewhere to pick up. I think it’s a duration issue.”

Ukraine exports about 5 million to 6 million tonnes of grain per month, Reuters reported, including 4.5 million tonnes of corn, 1 million tonnes of wheat and the rest barley.

This is traditionally a slow time in the Black Sea region, with not much exporting going on ahead of summer harvest.

“If you ever wanted to have a more limited impact on world grain trade, you would pick the months of March, April and May, before we get into the bigger export market in wheat starting off in late June and July,” Basse said. “This is the time of year when the Black Sea is more normally quiet.”

If Putin set his sights beyond Ukraine into other former nations of the Soviet Union, that would change the dynamics, Basse said. He also noted that global financial and technology sanctions by the United States and its allies did not include agriculture, which also lessens the potential for grain trade disruption.

“The sanctions we thought were going to have more bite, that would make commercial trade difficult, but they didn’t take that step,” he said. “They did not have the more dire aspect of preventing trade that a lot of us grain traders were thinking of.”

Another question is if Russia takes over Ukraine, will it apply its existing duties and quotas to the Ukrainian grain?

“Will there be a duty or a quota? Those are questions that are open at this point,” he said, adding that if the answer is “yes,” it would pressure the Ukrainian market domestically and raise some questions for large commercial grain companies that have load-out facilities in the nation.

In the event of significant disruption, there will be opportunities for other nations to supply wheat. It’s likely everyone would first turn to Europe, which is lagging far behind in export pace and probably has an extra 4 million to 6 million tonnes of wheat to push out, Basse said.

“The first choice will be Europe, which has the availability and then, if they have to, they can pivot back to the US, Australia and Canada,” he said. “I think that would be later on. On the corn side, due to the South American crop losses, the US has a real export opportunity from March into August.”