What will be the consequences of the war between Russia and Ukraine on prices in general and on food in particular? We don’t know, but we know that inflation is not a future hypothesis, it is already the reality.
The war between Russia and Ukraine it has just burst and we don’t know how it will evolve. We therefore do not know what the effects of the conflict will be on food and on the economy in general, but we already know what the consequences are right now.
As the TimeUkraine and Russia together account for more than a quarter of world trade in grainas well as a fifth of the sales of But. The closure of ports and railways in Ukraine, known as the breadbasket of Europehas already undermined the country’s merchandise exports. Compared to Italy in particular, Ukraine is our second supplier of maize with a share of just over 20% but also guarantees 5% of national wheat imports.
But it’s not just the import, there’s also the question ofexport: over the past seven years, Italy has lost around one and a half billion euros in non-exports to Russia, following the embargo on certain products, including San Daniele ham and Parmigiano Reggiano, decided by Putin in response to European Union sanctions following the 2014 invasion of Crimea. And according to Coldiretti, the war could cost us another billion.
It is then necessary to consider the indirect repercussions of the crisis on agriculture and therefore on food. Russia is also a major low-cost exporter of almost all types of fertilizer. If global trade is disrupted, there will be higher costs for farmers around the world and, therefore, higher inflation on food.
Prices are already on the rise, from wheat – which hit a record high yesterday, surpassing the level of 9 years ago, when there were so-called bread riots in North African countries – to maize , soy, up this week. . According to Rabobank analysts, a war that halts Ukrainian grain exports would likely raise grain prices by another 30% and corn prices by 20%.
The Guardian contains a brief but broad overview of the commodities and sectors most affected by the situation: besides wheat, there are oil, gas, gold and financial markets. What does it have to do with food? Everything is linked to it: because in an interconnected global market, any crisis in the sector is transmitted to many others. In addition, energy problems immediately affect all goods, since they increase transport costs.
Andrew Harig, vice president of the Food Marketing Institute said a few days ago at the annual meeting United States Department of Agriculture Forum that “inflation will rise. We just don’t have a full understanding of how the process works.” The inflation that has already characterized the last few months, between difficult environmental conditions that have led to a drop in agricultural production and a crisis in the supply chain, between trucks that block roads and container ships that do not unload in ports. Jack Scoville, vice president of Price Futures Group Inc., said the crisis in Ukraine will only drive prices up even more: “The sky is the limit,” and that unfortunately needs no translation.