THE invasion of Russia in Ukraine threatens two of the world’s major grain markets, pushing import-dependent countries from the region to look for alternative supplies while heightening concerns about global food inflation and hunger, according to a report Bloomberg.
Cereal exports from Russia are likely to remain on hold for at least the next two weeks, the local union said on Friday, following unrest in Black Sea. Ukrainian ports are closed from Thursday.
This means that the war temporarily deprives what represents more than a quarter of the world wheat trade and almost a fifth of the corn. The big importers are already considering their options to buy elsewhere, and prices for both cereals have risen dramatically in the last two days.
The unrest comes at a time when world crop prices have already skyrocketed and global hunger has risen dramatically in the past two years.
“There will be a big impact on wheat prices and bread prices for ordinary people,” he said on Friday. Director-General of the World Trade Organization Ngozi Okonjo-Jueala.
Russia and Ukraine supply grain to a long list of countries around the world, including large quantities to buyers in Middle East and Africa, who will have to look elsewhere and probably pay more for both the wheat itself and the shipping costs. THE Egyptthe leading importer of wheat, had scheduled a tender on Thursday, but canceled it after receiving only one offer for French wheat.
“It’s difficult to plan transactions at the moment,” he said Eduard Zerninheaded by Russian Association of Cereal Exporters. “I think it may take a few weeks.”
Demand is beginning to shift to alternative export sources, including India and her The European Unionaccording to two people familiar with the matter.
In Tunisiathe Ministry of Agriculture said he was looking for common wheat from her Uruguayτη Bulgaria and Romania to protect against possible supply disruptions while its flour mills Indonesia are also looking for other sources due to the escalating crisis. A Moroccan miller group said it would turn to Argentinaτη France and Polandaccording to President Abdelkader El-Alaoui.
However, the large role that the Black Sea plays in global grain markets means that alternatives may be limited. World grain stocks are already declining, making it harder to make up for lost supply.
“It is really pushing an already tight market and creating huge uncertainty for the coming weeks, if not months,” he said. James Bolesworthits CEO CRM AgriCommodities based in the United Kingdom. “For wheat and corn, it pushes demand to other parts of the world where we know stocks are tight.”
In addition to the problem of shipping to the Black Sea, some of Russia’s largest exporters of wheat with links to state bank VTB Groupwhich is now under sanctions by the US.
Either way, the war is likely to have far-reaching consequences, he said World Food Program.
“The impact of the conflict on food security is likely to be felt across Ukraine’s borders, especially to the poorest of the poor,” the Rome-based agency said in a statement. Stopping the flow of grain from the Black Sea region will also increase prices in a way that now adds to the existing fuel inflation and food inflation.
Source: News Beast
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