Joseph Stalin ostensibly said that quantity has its own quality. He cares more about tanks than food. Both are in balance while Russia invades Ukraine.
The country, the “bread basket of Russia” in the Soviet era, plays an important role in the global food supply. war Now threatening production. You can not plow, plant and harvest a field with containers placed on it. Wheat and corn prices soared to a decade-high on Thursday.
The Black Sea region that produces wheat is very important. Prices will continue to rise in a spiral as the conflict continues. Consumers in some of the most vulnerable countries in the world will feel the consequences most severely.
Food prices have already returned to the peak levels recently experienced in 2011. Rising inputs like fertilizers and fuel are contributing a lot according to the FAO. Broad indices of corn and wheat prices are both 20% higher than they were at the beginning of the current year. The prices of Paris wheat, a high-quality tahini grain used in flour and a source of much of that produced in Ukraine and Russia, have risen by almost 30% in the last two weeks, according to the Saxo Group.
No surprise given that Ukraine accounted for 9 percent of world wheat exports and 15 percent of corn exports in 2020. Russia produced 19 percent of world wheat exports that year.
Developing countries depend on both. Their biggest customer is Egypt which takes about a fifth of each country’s wheat shipments. Both Turkey and Bangladesh are big buyers while China gets more than a quarter of Ukraine’s corn exports.
But the wheat stock is meager. Russia has regularly imposed export restrictions on wheat to stabilize domestic prices. New taxes and quotas have already been introduced this year. This was in response to a pre-epidemic international supply deficit. Global stocks held primarily by China have been declining since 2019 and will fall further.
With food supplies already narrow, the conflict will put further pressure on other major exporters such as the US and the EU. The quantity will not be the quality of global food supply by 2022.
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