Consumers around the world will feel the ‘enormous impact’ of Russia’s war on Ukraine through soaring food prices and significant disruption to agricultural supply chains, industry leaders and analysts say. main European leaders.
John Rich, executive chairman of major Ukrainian food supplier MHP, said he feared for the vital spring planting season, which is essential not only for Ukraine’s domestic supplies, but also for the huge quantities of grain and vegetable oil that the country exports all over the world.
“This conflict has had a huge impact on Ukraine’s and Russia’s ability to supply the world,” Rich said.
The success of the planting season would be decided by “military action in the next week or two”, he added, warning that it would be jeopardized if the Russian army moved into the west of the country, which remained relatively unscathed.
Together with Russia, Ukraine is one of the main suppliers of cereals and sunflower oil to world markets, accounting for just under a tenth of world wheat exports, around 13% of maize and more than half of the sunflower oil market, according to UN Comtrade. Commodity prices soared after the Russian invasion, with wheat at one point reaching an all-time high.
Rich warned of “rampant inflation” in the cost of wheat, corn and other staples – the prices of which were rising before hostilities due to droughts and high demand as economies emerged from the pandemic. “It’s a pretty toxic mix,” he said.
Since the conflict erupted last month, the MHP has continued its humanitarian efforts from Slovenia, distributing food aid throughout Ukraine where millions of people have been displaced.
As MHP drivers crisscrossed Ukraine delivering food, Rich appealed for donations to continue relief efforts. “If we fail, food distribution will also fail,” he said.
The Food and Agriculture Organization of the United Nations has warned that up to 30% of cultivated land in Ukraine will not be sown or harvested this year due to the conflict.
Russia’s ability to export crops remains uncertain due to international sanctions, but the loss of export markets will hit the country’s farmers and lead to lower production, the UN body said in a published report. Friday.
Ministers attending a meeting of G7 agriculture ministers convened on Friday in response to the Russian invasion called on countries to avoid export bans and keep their food and agricultural markets open.
The EU gets half of its maize from Ukraine and a third of its fertilizer from Russia. Belarus, an ally of Russia, is another key fertilizer supplier. Fertilizer prices have risen sharply, with soaring prices for natural gas, the main ingredient in nitrogen fertilizers, also threatening supplies.
“From an EU perspective, this crisis has shown us that we have two sectors in particular where we have vulnerabilities. . . vegetable proteins and fertilisers,” Luis Planas, Spain’s agriculture minister, said in an interview. Supply chains from Ukraine and Russia have been “broken” due to the near closure of Black Sea ports.
Planas said Spain did not have a food supply problem but reported “a serious animal feed problem”, with around 22% of corn for cattle in Spain coming from Ukraine. He called on the EU to relax restrictions on insecticide residues and GMOs to allow more imports from Argentina and the United States.
Spain, he said, was “very worried about the price and supply of cereals in our immediate surroundings in the Mediterranean”. [region]including Egypt, Tunisia and Morocco. “We all have in mind the memory of 2011 and the Arab Spring” which was partly caused by high grain prices, he added.
In Brussels, EU member states are due to vote on March 21 on a plan to support farmers hit by high costs and the loss of exports.
Janusz Wojciechowski, EU Agriculture Commissioner, said the plan included allowing farmers to grow food crops for animals on land left fallow to benefit from subsidies and a change in the rules on agricultural aid. to allow governments to subsidize farmers suffering from high costs.
He also said there was no risk of food shortages in the EU, warning that the European Commission would take legal action against those who, like Hungary, have banned grain exports.
Farmers across Europe want concrete plans from governments and from Brussels. In Ireland, amid talks of reviving a scheme last used in World War II where farmers would be asked to grow extra grain, the leader of Macra na Feirme, a farmers’ association, called clarification on subsidies and tax incentives.
“We have identified that food security is a problem [and] that food safety is an issue. But as agricultural leaders, we have no certainty about what is on the table to solve this problem, ”said John Keane, its president.