Russian-Ukraine conflict spikes wheat prices

The growing conflict between Russia and Ukraine have resulted in global wheat prices to spiral upwards and its impacts are expected to spill over to nations across the word.

With the two nations catering to nearly a quarter of the world’s demand for wheat, the conflict is threatening to cut off international shipments of the crop.

Russia and Ukraine together feeds billions of people in the world in the form of bread, pasta and packaged foods. The countries are also key suppliers of barley, sunflower seed oil and corn, among other products.

The New York Times reported yesterday that the growing uncertainties are spurring shortages and pushing the price of a vital crop higher.

As of Friday (25), wheat prices were just under US $ 10/bushel, the highest since 2008. Over the past week and a half, leading up to the Russian invasion of Ukraine, wheat prices had increased by US $ 1.50.
On the Chicago Board of Trade, wheat futures expanded by 5.43 percent on Thursday, which outstripped gains by other commodities such corn and soybean oil.

Data from the International Monetary Fund (IMF) reveal that the price of wheat grew by 80 percent between April 2020 and December 2021.

International Food Policy Research Institute Senior Research Fellow David Laborde was quoted by The New York Times stating that the conflict would leave an “immediate impact on the global wheat market stability”.
“But the real test for the global food supply would be in four months when the next wheat harvest would begin,” he told The New York Times.

He cautioned that the global situation would turn gloomy, if farmers are unable to harvest due to the lasting military operations or if the port facilities and railroads have been damaged.

Countries in North Africa and the Middle East are likely to be hit hard, as they are particularly dependent on wheat from Ukraine and Russia.