Wheat prices soared to a 14-year high last week amid the ongoing Russia-Ukraine conflict which has severely impeded trade from Black Sea ports.
The rising wheat prices is likely to have a trickledown effect leading to costs that will inevitably be passed on to consumers worldwide, reported Reuters.
It said the global Chicago benchmark wheat trading price jumped by 40 per cent, which is likely to further drive up global food inflation.
Russia and Ukraine supply almost one-third of the world’s wheat exports, said the Financial Times, noting that Black Sea ports were now at a “virtual standstill”.
Julie Marshall, spokesperson for the World Food Programme, told Reuters that supply disruptions from Russia and Ukraine would effect millions of people, with the Middle East and North Africa especially vulnerable.
Analysts and food aid organizations were cited by the FT as saying the biggest impact will be on poorer nations.
“This is an unnecessary shock of mega proportions,” said Arif Husain, chief economist at the UN World Food Programme. “The war is only going to exacerbate the cost of food,” said Ismail Kemaloglu, the former head of the state Turkish Grain Board and now the director of the consultancy IK Tarimussu.
Agricultural experts warned of the impact of delayed shipments from the region. Joseph Glauber, former chief economist at the United States Department of Agriculture, told the FT that countries are “going to have to find different suppliers and all that means higher prices”.
Reuters noted that global stocks of major wheat exporters were already low prior to the crisis. It cited data from the International Grains Council showing supplies in the European Union, Russia, the US, Canada, Ukraine, Argentina, Australia and Kazakhstan would drop to a nine-year low of 57 million tonnes by the end of the 2021-22 season.
The cost of oil and gas has also surged due to some Western countries’ sanctions against Russia, said Reuters, and it noted that shipping freight costs were already at record highs due to COVID-19 pandemic-related supply chain disruption.
