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The US is shrinking in importance as a global supplier
06 January 2022Mr. Paul Hughes
For several reasons, the landscape of global agriculture is
shifting and with it the centers of power. Those shifts have tended
to be away from North America and the US, south to Brazil, and east
to the Black Sea and Europe.
If one uses world trade as a proxy for the most important
suppliers of ag commodities globally, the US is shrinking in
importance, while Brazil and Ukraine especially are growing. The US
market share of world corn exports approached 60% in the five years
of 2005/06-2017/18, in the most recent five years that share has
shrunk to 33%. Most of that share has been taken by Brazil,
doubling their market share and Ukraine more than tripling their
market share.
While the shift is not as dramatic in wheat, a move from North
America (the US and Canada) to the EU and the Black Sea (Russia and
Ukraine). In the five-year period of 2005/06-2009/10, the US and
Canada combined represented 36% of world wheat exports. In the most
recent five-year period, that market share has shrunk to 25%, with
the US shrinking from 22% to 13%. That share was mostly lost to the
EU and the Black Sea. In the same five-year periods export market
share of the EU and the Black Sea (Russia and Ukraine) went from
31% to 45% with Russia and Ukraine's market share nearly
doubling.
Now more than ever, one needs to think globally to fully
understand what is driving agricultural markets. With this shift
away from the US to other countries and regions come additional
weather/production considerations, currency risks, geopolitical
risks, and shipping/trade considerations.
IHS Markit, with its resources and analysis in macroeconomic,
country risk, maritime and world trade, energy, and currency
markets, is uniquely positioned to cover the new world of
agricultural commodities.
Posted 06 January 2022 by . [pulled from SAP], Executive Director, Research and Analysis, IHS Markit
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