‘It’s going to have a ripple effect’: How the war in Ukraine affects food prices everywhere – National

As Russian troops strengthen their control in Ukraine, there are growing concerns about the unintended consequences of the war, the food security crisis.

Some of the largest and most hungry countries rely on grain shipments from countries such as Ukraine and Russia. Together, these countries account for a quarter of the world’s total wheat exports.

The war will also raise fuel prices, which will affect the costs of food production and transportation. Fertilizer, an important component of agriculture, is also becoming more expensive.

One of the most vulnerable countries is Egypt. With over 100 million people, it spends $ 4 billion annually on food imports to feed its population, and 70% of its wheat demand comes from Ukraine and Russia.

The fact that exports from Ukraine are completely cut off presents a terrifying dilemma for Egypt and Turkey. This too depends heavily on the wheat in the region.

“This shortage is really important,” says Tymofiy Mylovanov, former Minister of Economy, Development, Trade and Agriculture of Ukraine. “Starvation will occur in certain countries,” he told Global News.

The war in Europe only adds to the sense of economic instability as the world continues to endure the effects of the COVID-19 pandemic.

The stock market has been on a roller coaster for the past few weeks as investors are addressing the potential long-term economic consequences of Russia’s invasion of Ukraine.

In the past, supply turmoil has led to political instability in countries with food insecurity at their best, and experts say that the same thing can happen if supply from Ukraine and Russia is cut off. I’m afraid.

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Famine-fueling battle: the tragic domino effect of the Ukrainian war

Mirobanov, who returned to Kyiv from the United States a few days before Russia’s invasion, said his sense of duty to his country had a direct impact on the Middle East, Africa and Southeast Asia.

A big power like Egypt will start looking at other suppliers, which will push up prices for everyone, he says.

“If you eat with 5 people and have 6 pieces of bread, the price of the bread is zero because there is something extra. But if you have 4 pieces, the price of the bread is all they have. Thing.”

Canadians do not immediately feel the effects of the crisis, but the spillover effect of global food shortages will ultimately lead to price increases here.

“We rely on the global trading market to be able to put food on the shelves of kitchens, refrigerators and grocery stores,” said Cereals Canada, a representative of Canadian grain farmers, processors and exporters. Dean Dias, CEO of the company, said.

“This shows that what happened in one part of the world is affecting other parts of the world.”

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How the war in Ukraine affects food supply and prices

Soaring wheat prices

The Ukrainian conflict is raising wheat prices. On Monday, the price of wheat bushels rose to US $ 12.94. This is more than 50% higher than in early 2022.

In the midst of the war, it is unclear whether Ukrainian farmers are willing to spend or are in a position to use the working capital needed to plant their next harvest.

This week, Ukraine announced that it would ban all exports of wheat, oats and other basic foods to prevent major food emergencies within the border.

Canada, which produces about 12% of the world’s wheat supply, is not currently in a position to make up for the shortfall.

Last year’s prairie drought drastically reduced Canada’s production from the usual 26.5 million tonnes to just 19 million tonnes. Most farmers sell all the wheat left over from last year’s harvest, and the supply from Canada is in short supply, further reducing the world’s supply.

“Canada wheat will be difficult to meet the demands there,” says Diaz. “Currently the biggest concern is this year. There is not enough supply to meet the demand there.”

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Crop loss due to heat and drought affecting Canada’s food supply

Unlike oil, which has an almost immediate effect on gas prices, grain prices can take weeks, if not months, to reach consumers. This is because raw grains need to be sent to processing facilities to make bread, pasta and other staples. This will take some time.

The Canadian Food Inspection Agency, the government agency responsible for managing food levels, states that Canadians do not have to worry about food supplies in the country.

In an email to Global News, the government said it was constantly monitoring the international agricultural market for food supply chain disruptions.

It’s not without its impact.

Prolonged wars are expected to increase prices for baked goods and other staples that are already expensive with clips faster than overall food inflation, according to Statistics Canada, according to Statistics Canada. ..

“Given we are in a world with a global supply chain, a shortage of grain from Russia (and Ukraine) means that European countries are willing to pay more for grain, which is the world. It will raise the price of wheat inside, “says Opher, a professor at the Rotman School of Management at the University of Toronto, Baron.

Europe and Egypt are not the only ones to surge supply from other regions. China, the most populous country in the world, has already scooped up more staple foods, including soy and corn from the United States.

Food, fuel, fertilizer

The war in Europe also threatens the global supply of fertilizer. Russia is an important producer of nitrogen, potassium and phosphorus fertilizers.

Fertilizer is an important ingredient in agriculture, but it also requires energy to produce. Russia is a major exporter of fertilizer, but widespread sanctions on its economy create uncertainty for farmers around the world regarding fertilizer availability and cost.

Russia’s invasion of Ukraine has boosted fertilizer prices by more than $ 200 overnight, observed Sylvain Charles Bois, senior director of the Institute for Agricultural Food Analysis at Dalhousie University.

“Before the conflict in Ukraine, fertilizers were already quite expensive,” he wrote in his research notes. “Exorbitantly high fertilizer prices can impact agricultural production in the Northern Hemisphere, including Canada. If Mother Nature does not cooperate again, this year will be another challenging year for our farmers. It may be, “he added.

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Record high fertilizer prices affecting Alberta farmers

The stock price of the Canadian fertilizer company Nutrien has risen significantly since the beginning of the war in Ukraine. The stock price on the day before the war was around $ 95. It’s $ 130 now.

Next is the energy cost. Global oil prices have already rebounded, well above $ 100 a barrel. It puts a lot of pressure on the cost of shipping food around the world and the cost of producing food.

Farmers, including Canadians, are in a pinch. They pay close attention to the price of energy, which has a significant impact on production and transportation costs.

This includes cattle and dairy farmers. Expensive grains enter the feed they use for animals and put upward pressure on the prices of meat and dairy products.

“Farmers need to pay attention to energy prices, […] As everyone in Canada is aware, gas prices are rising, “says Diaz. “That will be a big factor.”

Experts warn that the fear of further disruption in oil, food and fertilizer supplies will only make markets more volatile and more disturbing around the world.

“When there is a shortage of food in the world, history can help dilute people’s attention (…) and blame someone else at any time, so more and more governments could go to war. It suggests that, “says Baron.

“This could further exacerbate world peace and could affect Canada.”