Chinese officials warns that nation’s winter wheat condition could be “worst in history”.
While oil prices are exploding, and petroleum products are certainly a necessity in modern life, there is a potential developing crisis that could impact the global economy even more than energy.
As Russia continues to pound Ukraine, it is important to note that the region is responsible for about 1/3 of the world’s grain supplies.
Russia and Ukraine supply almost a third of the world’s wheat exports and since the Russian assault on its neighbour, ports on the Black Sea have come to a virtual standstill. As a result, wheat prices have soared to record highs, overtaking levels seen during the food crisis of 2007-08. “If farmers in Ukraine don’t start planting any time soon there will be huge crisis to food security.
If Ukraine’s food production falls in the coming season the wheat price could double or triple,” said the Dutch national, who has been farming for two decades in Cherkasy, 200km south of Kyiv. He is part of a farming union, whose 1,100 members cover just under 10 per cent of the country’s farmland. While well stored wheat, such as that on Huizinga’s farm, can last several months, agricultural experts and policymakers have warned of the impact of delayed shipments on countries reliant on the region for wheat, grain, sunflower oil and barley. “
They’re going to have to find different suppliers and all that means higher prices,” said Joseph Glauber, the former chief economist at the US Department of Agriculture and a senior fellow at agricultural policy think-tank IFPRI.
The prices are rising fast, even in regions that export wheat.
Even consumers in two of the world’s biggest wheat-growing nations, Canada and the United States, are paying the price.
“Unfortunately for the short and intermediate term, food inflation and the cost of baked goods in the United States will go up more. This will impact the most vulnerable in our society the most,” said Robb MacKie, president and chief executive of the American Bakers Association.
Weeks before the latest wheat price spike, Calgary Italian Bakery in Alberta raised prices 7% to keep pace with costs associated with last year’s Canadian drought and inflation in prices of flour and yeast.
Now Louis Bontorin, co-owner of the 60-year-old family business, fears he will need to raise prices significantly again, once he has depleted his four to five months’ flour supply.
“This could be really, really devastating,” Bontorin said. “Bread is one of the fundamentals, the essentials, and that’s the hard part. You’re trying to just take what you need, but you’re also cognizant of what effect (higher price) has on the consumer.
“The buying power of everybody is just being eroded.”
The stability of regions even more dependent on Russian-Ukrainian wheat is threatened.
Cairo relies on large volumes of heavily subsidized imports to ensure sufficient as well as affordable supplies of bread and vegetable oil for its 105 million citizens. Securing those supplies has led Egypt to become the world’s largest importer of wheat and among the world’s top 10 importers of sunflower oil. In 2021, Cairo was already facing down food inflation levels not seen since the Arab Spring civil unrest a decade earlier that toppled the government of former President Hosni Mubarak.
After eight years of working assiduously to put Egypt’s economic house back in order, the government of President Abdel-Fattah el-Sisi is now similarly vulnerable to skyrocketing food costs that are reaching budget-breaking levels.
How much worse can it get. China, the biggest consumer of wheat, is warning that the condition of the nation’s winter wheat crop could be the “worst in history.”
Speaking to reporters on the sidelines of the country’s annual parliament meeting, Minister of Agriculture and Rural Affairs Tang Renjian said that rare heavy rainfall last year delayed the planting of about one-third of the normal wheat acreage. read more
A survey of the winter wheat crop taken before the start of winter found that the amount of first- and second-grade crop was down by more than 20 percentage points, Tang said.
“Not long ago we went to the grassroots to do a survey and many farming experts and technicians told us that crop conditions this year could be the worst in history,” he said. “This year’s grain production indeed faces huge difficulties.”
War – check.
Pestilence – check.
Famine – This looks like the next horseman lining up to make an appearance.
But the good news: No mean tweets. We can take comfort in that.DONATE
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