All-time high price for grains. War in Ukraine pushes the world to the brink of famine
Black Sea wheat accounts for almost a third of world trade
30% of the world wheat trade accrues to Ukraine and Russia. War instigated by the Kremlin has already led to the unprecedented price increase and the imbalance of the world food trade. The UN is somewhat afraid of famine and political turmoil in poorer countries, points out RFI.
Russia's invasion of Ukraine has had an immediate effect on grain prices. The quoted price on the Paris futures exchange, Matif, has soared to 420 euros per tonne compared to pre-war 280 euros, and it has exceeded the figures recorded for 2007-2008 "Arab spring" and food riots.
UN Secretary-General António Guterres sounded the alarm that war in Ukraine may cause political unrest in many countries and a "hurricane of hunger and a meltdown of the global food system."
“The AFO's global food prices index is at its highest level ever. The world's 45 African and least developed countries import at least one-third of their wheat from Ukraine or Russia – 18 of those countries import at least 50 percent. They include Burkina Faso, Egypt, the Democratic Republic of Congo, Lebanon, Libya, Somalia, Sudan, and Yemen,” stated António Guterres, calling for an immediate cessation of hostilities.
"Black Sea wheat accounts for almost a third of world trade," explains RFI Sébastien Poncelet, Development Director at Agritel, an agricultural price analysis firm.
Because the vast majority of transportation is carried out through the Black Sea, the blockade of the Ukrainian ports will affect where the supplies are being received. Naturally, it brings about longer delivery times for buyers such as Egypt, for example.
It applies to other grains as well, not just wheat. For the last couple of years, the Ukrainian export of corn has significantly grown; the country is the fourth-largest exporter and is responsible for 16% of the world corn trade. Ukraine is also the world's largest exporter of oil.
Uncertainty about the sowing campaign is a threat to the market. War undermines sunflower and corn sowing. And in case of prolonged battles, the summer wheat crop may be affected. The Ukrainian government has already suspended the export of rye and restricted the export of wheat, corn, and sunflower oil.
The analyst Pierre Brodersen told DW it's unclear who will harvest after hostilities and in what condition the infrastructure for mowing, restoring, transporting, and exporting will be.
He reminds that one of the first Russian army's moves during the attack on Ukraine was capturing Snake Island near the Romanian borders. All for controlling the paths to Ukrainian Black Sea ports.
Meanwhile, it became known that Putin had been stealing grain from Ukraine. Apparently, it gets shipped out by Russia from Berdyansk.
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