Russia’s stranglehold on the Port of Odessa, a crucial export port in war-torn Ukraine, could trigger a spike in world food prices of up to 25% - with disastrous consequences for countries whose impoverished people are already threatened by hunger because of wheat shortages.
To mitigate against this, a logistics company based in the Black Sea port is appealing to producers the world over to export surplus wheat in an attempt to refloat fast-dwindling globally available stocks.
According Daniil Melnychenko from Informall BG, ramped-up exports from producers other than Ukraine could have a cooling effect on import markets and the price reaction of certain staples to what’s happening in Ukraine.
It was also an opportunity, he said, for alternative exporters to rearrange supply chain dynamics with countries generally dependent on Ukraine for food imports.
Most prominent of these, Informall indicated, were Turkey, Egypt, Indonesia, Iran, Pakistan, Saudi Arabia, Bangladesh, Yemen, Lebanon and Nigeria.
A silver-bullet solution for the worldwide shortfall of Ukrainian grain would be unblocking Odessa so that outflows from the country’s silos could restart.
But Russia, itself an important exporter of grain but sanctioned because of the fire it’s raining down on its neighbour, has unrelentingly pounded the port with heavy artillery, crippling Ukraine’s position as a global staple provider.
UN Secretary-General António Guterres earlier this week warned that the world was facing food insecurity on a scale never seen before unless urgent steps were taken to rebalance staple availability.
He said if ports like Odessa remained closed to crucial outflows, 44 million people could face starvation, a dire situation that could take years to turn around if a cessation of hostilities between the world’s leading granary countries was not secured soon.
Russia though is slowly shelling Ukraine’s east into submission, while farmers in that region sit with silos full of grain.
That is the tragedy of it all, Guterres said – Ukraine’s resilient agricultural sector finding itself in a position to bring relief despite Russia’s unforgiving onslaught.
However, export data coming out of Ukraine is already showing the effect the war is having on its yield.
For the months of March and April, its export earnings fell $1.5 billion.
Apart from being responsible for about 10% of the world’s wheat consumption in 2021, Ukraine managed 16% in global exports of corn and 55% of sunflower oil for the same period – figures that at the end of this year won’t be repeated.
And although Ukraine’s farmers are showing real grit, tilling fields dotted by exploded missile shells, about 30% of the country’s crop capacity remains unplanted because of Russian shelling. - Source: The Loadstar.
