(Finance) – The Russia and Ukraine are responsible for 29% of the world trade in wheat. Any major disruption of production and exports from the region could push the food prices beyond the current highs in over 10 years. This, according to the United Nations World Food Program (WFP), will erode the food security of millions of people, especially those who are already under stress from high levels of food inflation in their countries.
“This it is not just a crisis within Ukraine. This will affect supply chains and especially the cost of food – said WFP Executive Director David Beasley – We are now seeing a rise in prices that will cost us an additional $ 60 million to $ 75 million a month in operating costs. . And that means more people will go to bed hungry. “” In a year when the world is already facing an unprecedented level of hunger, it is simply tragic to see hunger lift its head in what has long been Europe’s granary“, he added.
The situation was in fact far from rosy even before the outbreak of the conflict in Ukraine. L’FAO Food Price Index, which records the monthly changes in international food prices, reached 140.7 points in February, an increase of 3.9% compared to January and 24.1% compared to a year ago. The data also represents a new all-time highexceeding the previous high of February 2011 by 3.1 points. The increase in February was led by strong increases in the sub-indices of the vegetable oils and dairy products. Grain and meat prices also rose, while the sugar price sub-index fell for the third consecutive month.
“In the commodities sector, the tougher US and European sanctions against Moscow can lead to the cutting part of the supplies from Russia, thus affecting several key commodities, from gas and oil to several industrial metals and key crops such as wheat – commented Ole Hansen, Head of Commodity Strategy for BG SAXO – Ukraine, often called the granary of ‘Europe given its vast fertile lands, has seen supply chains break with closed ports preventing the export of key food items such as wheat, barley and corn“.