Russia Ukraine friction escalated, the global stock index shook, crude oil hit a seven-year high, and safe haven assets such as gold were sought after.
Russia plays an important role in the global energy market, including crude oil and natural gas. Ukraine, known as the “European granary”, is an important grain exporter in the world. The escalation of the situation between Russia and Ukraine may have an impact on the international Shenzhen Agricultural Products Group Co.Ltd(000061) trade pattern
30% of China’s imported corn came from Ukraine,
A shares Shenzhen Agricultural Products Group Co.Ltd(000061) many shares rose
According to China Central Television finance and economics, Ukraine is one of the main sources of China’s corn imports. According to customs data, in 2021, China imported 8.24 million tons of corn from Ukraine, accounting for 29.07%. It is understood that the corn imported from China is mainly used for feed processing. Corn imported from Ukraine mainly starts from Kiev port and is transported to ports in eastern and southern China by sea.
Importers told reporters that they are more worried about price changes than shipping schedule. Recently, the import price of corn has continued to rise. From 1900 yuan per ton at the end of last year, it has risen to 2600 yuan per ton at present.
China Central Television finance quoted experts as saying that once the conflict intensifies, it will continue to push up the import price of corn in the short term.
On February 24, several stocks in the A-share Shenzhen Agricultural Products Group Co.Ltd(000061) sector rose. Among them, suken agriculture and Jinjian Cereals Industry Co.Ltd(600127) increased by more than 7%, and Heilongjiang Agriculture Company Limited(600598) increased by more than 4%. In addition, the Shandongsino-Agriunitedbiotechnologyco.Ltd(003042) , Asia-Potash International Investment (Guangzhou) Co.Ltd(000893) of fertilizer agriculture increased by more than 6%.
Ukraine has the largest territorial area in Eastern Europe except Russia. It is one of the three black land distribution regions in the world, accounting for one quarter of the black land area in the world. With fertile black land and vast plains, these unique planting conditions have made the agricultural development of Ukraine very good, which is known as the granary of Europe.
Russia is the world’s largest exporter of wheat. Ukraine is a supplier of wheat, corn and other food crops. It also controls the export of a large amount of sunflower seed oil
source: Guosen futures
According to the statistics of the U.S. Department of agriculture, the total wheat exports of Russia and Ukraine in the sales year from 2021 to 2022 are expected to be 206.9 million tons, accounting for 23% of the total global exports. In terms of corn, Ukraine is expected to account for 16% of the total global corn exports.
Among the Middle East countries, Lebanon, Libya and Egypt are highly dependent on wheat exports from Russia and Ukraine. The world food program also purchases wheat from Ukraine to provide food aid to Yemen and Syria.
Due to covid-19 epidemic, global inflation and many other factors, the global food price is now close to a 10-year high. The huge supply proportion of Russia and Ukraine means that if either party’s export is interrupted, it may lead to another surge in global food prices. In the Crimean crisis in 2014, international wheat prices rose by more than 20% in two months.
It is worth noting that on February 24, the General Administration of Customs issued an announcement that wheat imports across Russia were allowed. According to the announcement, Russian wheat refers to spring wheat planted in areas within the Russian Federation where wheat dwarf fishy smut does not occur and is limited to processing purposes
Black & non-ferrous metal market may be impacted
In addition to the fluctuation of energy and Shenzhen Agricultural Products Group Co.Ltd(000061) price caused by the conflict between Russia and Ukraine, the Black & non-ferrous metal market may be affected.
Ukraine is an important exporter of iron ore pellets in the world. Its export volume in the first 11 months of 2021 is second only to Brazil and Sweden. China has always been a big buyer of Ukrainian pellets. According to UN COMTRADE, China accounts for about 25% of the export destinations of Ukrainian pellets. According to Bloomberg data, China and Southeast Asia accounted for about 58% of the revenue sources of ferrexpo, a Ukrainian pellet producer, in 2020. Europe and other East Asian countries are also important buyers of Ukrainian pellets.
Among China’s major sources of iron ore imports, Ukraine ranks fifth, accounting for about 1.6% by quality, behind Australia, Brazil, South Africa and India.
As the world’s major aluminum exporter, the dispute between Russia and Ukraine has once again cast a worrying shadow on the global aluminum supply. Traders are worried that if the United States and Europe increase sanctions against Russia, it will affect the supply of aluminum and further push up the price of aluminum.
Rusal is the world’s third largest producer of aluminum and alumina. Its aluminum production accounts for about 6% of the world’s total output. When the company was sanctioned by the United States in 2018, it once significantly pushed up the international aluminum price. Now, the risk is approaching again. The stock price of Rusal trading in Hong Kong, China once plunged 22% on the 22nd, the largest one-day decline since it faced sanctions in April 2018.
On February 24, the stock fell sharply again, once falling by more than 14%. Although it rebounded in subsequent transactions, international investors are still worried that the supply risk of aluminum may be further exacerbated by geopolitical tensions, especially under the current situation of tight supply due to the growth of demand for aluminum products, once the conflict escalates, In addition to the direct impact on the supply from Russia, the rise in energy prices caused by the conflict between Russia and Ukraine will also push up the production cost of aluminum and help raise the price of aluminum products.
