The prolongation of the war between the two countries, considered the world’s granaries, is driving up food prices in international markets and embodying fears of growing malnutrition in the planet’s most vulnerable areas. Food price index of the UN food and agriculture organization FAO in March record level of 159.3 points12.6% more than February, the highest in the historical series so far.
FAO does not hesitate to attribute the increase to “the war in the Black Sea region, whose impact extends to the grain and vegetable oil markets”. Thus, in March, wheat prices rose 19.7% (between Russia and Ukraine this accounts for 30% of grain exports) and corn prices increased 19.1% (two countries in conflict account for 20% of sales to the entire planet). These increases drifted into the rest of the grains: Since FAO started to monitor their prices with a uniform methodology in 1990, sorghum and barley have also broken historical records.
Vegetable oils further increased their prices: a 23.2% compared to February. The fall in exports of sunflower oil, 80% of which is produced in Russia and Ukraine, has pushed up other products in this category: those from soybeans, rapeseed and palm are already putting upward pressure on their prices. It depends on different problems in the main producing countries and the increase in oil prices.
The war is also behind FAO’s downward revision of its grain production and trade forecasts for the remainder of the 2021/2022 season, which ends on 30 June. Wheat production in Ukraine will fall, the organization predicts, because “at least one 20% of the planted area in winter could not be harvestedas a result of direct destruction, limited access or lack of resources to harvest what has been planted”. In the case of Russia, although the weather has been good for harvesting in recent months, FAO warns of uncertainties regarding the “import of agricultural materials” required for harvesting.
Regarding the grain trade, FAO is revising its forecasts downwards and now a 2% reduction Compared to the 2020/2021 season, the interruption in export flows, again due to the war and the interruption in export flows from Ukraine and Russia, will only be partially offset by increased sales from the European Union and India – in the case of wheat -. According to the estimates of the international organization -for corn- Argentina, India and the United States.