Justin Ohms
2 min readApr 18, 2023

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There really isn’t a “global market” so that is kind of why this doesn’t make sense if there was a global market it might work the way you think. But for a physical good like grain, location matters. (Commodities and futures are financial instruments that are mostly disassociated from their underlying physical good)

But more importantly. A greater percentage of Polish grain is produced for domestic use. Ukraine on the other hand uses proportionally a very small percent of its production domestically. So the way to think of this is to consider it not as Ukraine wheat vs Polish wheat, but Polish wheat vs Egyptian or Sudanese wheat that happens to be grown in Ukraine. But see now it can’t make it to those markets as easily, so where does it go… it goes to the EU and Poland. Why don’t the Poles sell to Egypt and Sudan at these same higher prices, well they do or at least they try but their cost of transport plus the underlying production costs are too high therefore the Egyptians and Sudanese can’t afford it. Remember it’s a long trip from Poland to Egypt by boat, much further than from Odessa.

Here is another way to look at it. Think of Ukraine as a supermarket for Africa and the Middle East, while Poland was more of a neighborhood market for northern Europe and Scandinavia. The supermarket might have better prices but it’s going to take you more gas to get there so instead you go to the local market. But now there is road construction so none of the supermarkets old customers can get there easily so now the start to incentivizes the local markets customers with really low prices

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