The ongoing conflict between the two nations, long recognized as the world’s breadbasket, is pushing food costs higher on international markets and heightening fears of worsening malnutrition in the world’s most vulnerable regions. The FAO Food Price Index reached a record high in March, at 159.3 points, up 12.6% from February and marking the highest level in its history.
FAO attributes the rise to the war in the Black Sea region, noting that its effects ripple across grain and vegetable oil markets. In March, wheat prices surged by 19.7%, with Russia and Ukraine together accounting for about 30% of global grain exports. Corn prices climbed 19.1%, as the two conflict parties represent roughly 20% of global corn sales. These gains have pulled up other grains as well; since FAO began tracking prices with a uniform methodology in 1990, sorghum and barley have also hit new peak levels.
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Vegetable oils have also risen, with a 23.2% increase over February. The export shortfall of sunflower oil — about 80% of which comes from Russia and Ukraine — has pushed prices for related oils higher, including soy, rapeseed, and palm oil. The trajectory reflects a mix of supply disruptions in the main producing countries and broader upside pressure on oil markets.
The conflict is contributing to FAO’s downward revision of grain production and trade forecasts for the remainder of the 2021/2022 season, which concludes on 30 June. Ukraine’s wheat output is expected to fall as at least one-fifth of the winter planted area could not be harvested due to direct fighting, limited access, or resource shortages. In Russia, even with favorable harvest conditions recently, FAO cautions about uncertainties surrounding the import of agricultural inputs needed for harvests.
At least 30 dead and 100 injured in Russia’s attack on a train station in Kramatorsk.
On grain trade, FAO has trimmed its forecasts for a 2% decline against the 2020/2021 season. Export disruptions tied to the war and the pause in shipments from both Ukraine and Russia will be only partly offset by higher sales from the European Union and India for wheat, and from Argentina, India, and the United States for corn. The organization stresses that these projections reflect a fragile balance and a fragile path toward stabilization in global markets.
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