War in Ukraine to cause bread, pasta price increases
Wheat prices continue to rise as a result of the war in Ukraine. The Russian invasion brought the export of grain from the besieged country and Russia to a halt. Ukrainian farmers are also unable to set up new crops, which will also contribute to shortages in the long term and thus to higher prices. This means consumers will pay more for bread, pizza, pasta, and other grain products.
Ukraine and Russia account for over a quarter of the world's wheat exports. The continued fighting resulted in closed ports, among other things, which brought transport to a standstill and threw logistics into disarray. The war also threatens this year's wheat planting in Ukraine as farmers could get involved in the fighting. The shortages are likely to spill into the next season or possibly even longer.
On the futures trade, the price of wheat rose by about 7 percent. As a result, prices continue to increase, while the wheat price had already increased by 41 percent last week. That was the highest weekly price increase in over 60 years.
Wheat prices are at their highest level since the food crisis of 2008. According to the United Nations, food prices are already at an all-time high and are set to rise further. This will exacerbate importers' problems and lead to even more people suffering from hunger.
The war makes everything more expensive. In addition to wheat, prices for energy, metals, and other crops are also rising. The increased prices further fuel the inflationary pressure weighing on the global economy.
Meanwhile, several governments are taking measures to secure domestic food supplies. Hungary, for example, banned grain exports. Argentina, Turkey, and Indonesia are also taking steps to increase control over local production. And Moldova has temporarily halted exports of wheat, maize, and sugar.
The United States, Canada, and Western Europe are likely to plant more in response to the price hike. The problem is that weather extremes, like major drought or a lot of rain, make record harvests in these regions far from certain.
Reporting by ANP