The war in Ukraine is driving up the prices of certain raw materials. Gas reached a new historic record on Friday in Europe, oil also soared. And the food is not left out. Wheat is close to 400 euros per tonne whereas it was at 280 euros before the start of the armed conflict.
In the short term, prices should rise further. This is at least what Jean-François Loiseau, the president of Intercéreales, anticipated. The reason is simple: Ukraine and Russia account for 30% of the world wheat trade.
There will therefore be strong demand in certain client countries, in particular, in the Maghreb, the Near and Middle East. Their reserves are more or less important: nine months in Egypt according to the government, a month and a half in Lebanon according to the importers.
So, the fear of missing out pushes some customers to anticipate purchases and drives up prices.
This inflation itself is not without problems. The World Food Program fears this will erode the food security of millions of people. This could, for example, aggravate the food crisis in Yemen. Inflation will also eat into WFP’s budget. The UN agency foresees an additional cost of 60 to 75 million dollars per month for its operational expenses.
Because these tensions occur in an already inflationary context. World food prices hit a record high in February, notably due to vegetable oil tariffs.
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