Analysts say tensions between Russia and Ukraine will reduce food supplies and lead to higher prices

Rising tension between Russia and Ukraine (and thus the West), two heavyweights in global agriculture, increases the risks of supply disruptions and global food inflation, as well as higher fuel prices. Because of the additional gains in grains and foods. Oilseeds, revealed this Tuesday by the agency “Reuters”.

Analysts and traders said bad weather is likely to force buyers of wheat, corn and sunflower oil to seek alternative shipments, pushing global food prices to near multi-year highs.

The two countries account for about 29% of global wheat exports, 19% of global corn supply and 80% of global sunflower oil exports, so any military intervention made traders fear the movement of crops and triggered the race. Black Sea region.

Chicago wheat futures jumped more than 2% on Tuesday, corn hit a seven-month high and soybeans were also higher. All three major food and feed components are up about 40% from their 2021 lows, driven by lower global production and strong demand.

Finn Zippel, agribusiness economist at National Australia Bank, acknowledged that “supply disruptions from the Black Sea region will affect overall global availability”. “Buyers from the Middle East and Africa will look to alternative sources.” About 70% of Russian wheat exports went to the Middle East and Africa in 2021, according to Refinitiv data.

“Ships are avoiding entering the Black Sea for fear of war,” a Singaporean trader told Reuters. “The supply disruption is already happening.”

The United Nations food agency revealed late last year that global food prices are already near 10-year highs, driven by strong demand for wheat and dairy products. There is also additional support for agricultural markets from higher crude oil prices, with increased use of agricultural products in the manufacture of alternative fuels.