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48 CHAPTER 2


The effects of these export restrictions in India, Ukraine, Argentina, Rus- sia, and Kazakhstan also seem to be apparent in descriptive data (1, 2, and 4 in Figure 2.18). Ukraine imposed fairly tight export quotas as early as the sec- ond half of 2006 when monthly exports dropped by two-thirds. India imposed an export ban in February 2007, and then in late June Ukraine announced new export quotas that virtually imposed a complete export ban, so that from July 2007 to March 2008 Ukraine scarcely exported any wheat. Drought in Austra- lia significantly reduced the wheat crop there, and Europe’s combination of too much rain in France and Germany and too little rain in Eastern Europe resulted in reduced exports in the second half of 2007. These events coincided with U.S. wheat prices rising by 70 percent from April to August 2007 and a surge in demand for U.S. wheat exports. In August U.S. wheat exports doubled from their July level of 2.2 million tons to reach 4.4 million tons in August and September 2007 (4 in Figure 2.18). The August–


Figure 2.18 Wheat exports: Droughts, export restrictions, price increases, and import surges


U.S. wheat exports (mmt) 5.0


4.5 4.0 3.5 3.0 2.5 2.0 1.5


0.5 1.0


1. Poor harvests lead to export quotas in Ukraine (late 2006) and export ban in India (Feb 2007).


2. Jul: Ukraine essentially bans exports for rest of 2007.


8. U.S. stocks fall by 4 mmt in 2007/08, or from 22% to 13% of use.


4. Aug–Sep: drought in Australia puts pressure on other markets. U.S. exports double: MENA buys extra 1.2 mmt, 65% of that is to Egypt. E.U., Asia, Americas, and Africa raise exports, too.


Wheat exports Wheat prices


6. Oct 07–Feb 08: prices rise 45%, or another US$146.


7. Jul–Aug: exports up 1.75 mmt: Iran  0.4, MEX  0.21 IDN  0.2 Nigeria  0.18. Re-stocking?


Wheat prices (U.S. dollars) 500


400 450


5. Dec–Feb:


ARG, RUS, KZK restrictions.


350


3. Apr–Aug: prices up by 70%, or US$140.


300 250 200 150


100


Source: Headey (2010). Notes:


The wheat price relates to U.S. Wheat No. 2, Hard Red Winter, but trends for the soft red are very similar. ARG, Argentina; IDN, Indonesia; KZK, Kazakhstan; MENA, Middle East and North Africa; MEX, Mexico; mmt, millions of metric tons; RUS, Russia.


Jan 2006 Mar 2006 May 2006 Jul 2006 Sep 2006 Nov 2006 Jan 2007 Mar 2007 May 2007 Jul 2007 Sep 2007 Nov 2007 Jan 2008 Mar 2008 May 2008 Jul 2008 Sep 2008 Nov 2008 Jan 2009 Mar 2009 May 2009


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