Xinhua News Agency, Chicago, March 13 (International observation) The conflict between Russia and Ukraine increases the risk of global food supply
Xinhua News Agency reporter Xu Jing
Since the outbreak of the Russian-Ukrainian conflict, global food prices have continued to rise and have climbed to multi-year highs. Analysts believe that if the conflict continues or even intensifies, it could trigger a global food supply crisis.
The price of wheat futures on the Chicago Board of Trade rose more than 70% this year, hitting a new high since March 2008. Corn and soybean futures are up about 30 percent and more than 25 percent, respectively, this year, hitting their highest levels since 2013 and 2012, respectively.
Russia is the world‘s leading wheat producer and exporter. According to data from the US Department of Agriculture, Ukraine and Russia together account for nearly 30% of global wheat exports, making them an important “granary” in the world. The supply chain disruption caused by the conflict between Russia and Ukraine has tightened market supply and triggered sharp fluctuations in global food prices.
Ukraine has closed its domestic ports following the outbreak of the conflict, according to the Ukrainian Maritime Administration. In addition, the spring planting season is approaching, and the continuation of the conflict could lead to a sharp decline in the corn acreage in Ukraine, while the interruption of crop fertilization will also affect harvest expectations.
In order to ensure domestic supply, the Ukrainian government announced on March 9 that it would ban the export of staple agricultural products such as wheat and oats, as well as corn and buckwheat. The outside world is worried that this move will reduce the global food supply and seriously affect the food imports of many countries in Asia, Africa and Europe.
For Russia, Western sanctions have discouraged many buyers from ordering Russian goods, and banks are reluctant to finance trade in Russian goods, making it more difficult for Russian agricultural products to access global markets.
The Chicago-based agricultural resources company said that the United States and Europe plan to cancel their respective most-favored-nation treatment for key Russian products, and the tariffs faced by Russian goods exports are expected to rise from the current 3% to 20% to 30%.
Russian agricultural consultancy SovEcon Research said a few days ago that considering factors such as supply chain disruptions, Russia’s wheat export forecast for this year will be lowered by nearly 30 million bushels to 1.231 billion bushels.
Analysts believe that the conflict between Russia and Ukraine has triggered global food security anxiety. Major consuming countries are strengthening purchases to ensure supply, major importing countries in the Middle East and North Africa are looking for new sources of supply, and many countries have stopped exporting agricultural products.
Lebanon, Egypt and other countries rely heavily on Ukraine’s wheat imports, and more than half of Lebanon’s imported wheat is supplied by Ukraine. The Lebanese government issued a ban on the 11th, prohibiting the export of local food. Egypt also banned exports of wheat and flour last week.
In addition, Indonesia has tightened palm oil exports. In the Black Sea region, Bulgaria is snapping up local grain reserves in case domestic supplies are hit after a neighbouring country imposes an export ban.
Market analysts believe that the United States, Canada, Australia and other countries are expected to increase the planting area of wheat, corn and soybeans, but they still cannot make up for the supply gap in the Black Sea region. In the long run, global agricultural supply will tighten further and prices will continue to rise. (Participating reporter: Liu Zongya)
(Editor in charge: Feng Hu)