Ukraine: Russia invasion 'could increase food prices' says Smith
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The supply chain crisis has erupted as countries have stifled trading with Russia over its brutal invasion, with Russian exports banned as sanctions cripple its country. And while Ukraine battles for survival, the country has been forced to close its ports, with farms in the country’s east also at risk. As Ukraine and Russia are both major producers and exporters of agricultural commodities like corn, wheat, oilseed, and barley, major supply chain issues have been tipped to send the prices of these products soaring here in the UK.
Russia is, in fact, the world’s biggest exporter of wheat, producing around 18 percent of international exports.
And wheat prices in Britain already hit a 14-year high last week following Russia’s invasion of Ukraine.
But Katie Tamblin, Chief Product Officer at Achilles, warned that prices of everyday commodities are tipped to soar further.
She told Express.co.uk: “According to Commodities Analysis and Insight Ltd, prices had already increased on food commodities by around 15-25 percent on last year due to inflation and rumours of conflict.
“However, Russian and Ukraine account for almost 30 percent of global wheat, 18 percent of maize and 50 percent of sunflower seed production.
“According to the latest Mintec Analytics report, consumers will likely see prices increase further.
“When Crimea was annexed back in 2014, for example, prices of wheat and maize rose by 20-25 percent, so there is potential for similar price increases to hit consumers’ back pockets in the not too distant future.”
One positive may be that 80 percent of wheat used in the UK is grown domestically, according to the Federation of Bakers.
But that does not mean that Britain will be protected from the soaring global prices.
Alex Waugh, director of the UK Flour Millers association said: “Between February 16 and March 3, the quotation for wheat on the London futures market rose by 28 percent.
“This sharp jump in market prices follows earlier increases as a result of relatively poor harvests in 2021. It is inevitable that in time they will feed through in increased consumer prices for a range of foodstuffs that depend on grain as a key input.”
Wheat is commonly used in bread, so the price rise is likely to be passed on.
But this is not the only product that has been tipped to soar in price.
Ms Tamblin told Express.co.uk: “These grains are also used in feed for animals, so Commodities Analysis and Insight Ltd. also predict prices will feed into higher costs of some meats, especially beef.”
This also comes after Russia announced it would stop exporting ammonium nitrate, a key chemical used in the agriculture industry as a fertiliser to boost yields for crops like corn, cotton and wheat.
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Brandon Weichert, geopolitical analyst and author of Winning Space: How America Remains a Superpower, told Express.co.uk the move will send food prices soaring.
He said: “The impact will be a massive spike in prices, especially as other factors harm the production of, for example, corn and soybean products which are going into harvesting season presently in Latin America.
“The decision to sanction fertiliser exports going from Russia to the rest of the world is massive, especially when paired with China’s decision to ban the sale of phosphate fertiliser until June of 2022.
“These twin moves will spike the overall price of agricultural goods–meaning you and I and our families will be paying much more for groceries.”
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