The Ukraine war drives up grain prices. Consumers are now feeling this clearly when shopping. But the end of the road has probably not yet been reached.
With his war of aggression, Russian President Vladimir Putin attacked one of the largest breadbaskets in the world: Ukraine can hardly export grain, and sea routes and ports are blocked. This has consequences above all for customer countries in Africa and Asia. One of the greatest famines in human history is now threatening there. Because many and especially poorer countries are urgently dependent on cheap wheat from the country.
For Germany, imports from the Ukraine play a subordinate role with a share of 1.9 percent. A total of around 11.4 million tons of grain worth 3.2 billion euros were imported last year. At the same time, Germany exported 11.7 million tons worth 2.8 billion euros.
Nevertheless, the considerable shortage on the wheat market is not without effects in this country either. “The prices in the supermarket for flour, oatmeal, muesli and cereals but also pasta have already risen,” according to the Association of Grain, Milling and Starch Industries (VGMS).
According to the latest data from the Federal Statistical Office in Germany, consumers had to pay a total of 8.7 percent more for bread and cereal products in April than a year earlier. Wheat flour rose significantly in price by 21.4 percent. Bread and rolls cost 9.6 percent more than in April 2021.
But according to experts, this is not the end of the road. “Grain is becoming more expensive worldwide and this even before the war in Ukraine, which has drastically aggravated the already tense situation on the grain market,” said a spokeswoman for the Grain, Milling and Starch Industry Association on request. “In view of the cost situation for grain and the cost increases in all relevant areas – energy, packaging, logistics – further price increases are likely.”
Because: For a German company it is therefore irrelevant whether it buys grain from German, Polish or Ukrainian production – the price for this is set on the Matif futures exchange in Paris and the already tense world food market was hit again late Friday evening.
The world’s second largest wheat producer, India, has banned the export of the grain with immediate effect. The country is the second largest wheat producer in the world – 110 million tons in 2021 – and has large reserves. Actually, India had only recently announced that it wanted to export more wheat in view of the global food crisis.
But then the current extreme heat in India intervened. This reduces the wheat harvest by almost six percent, according to the Department of Food
The agriculture ministers of the G7 countries criticized India’s decision to ban wheat exports on Saturday. The G7 member states spoke out against export bans, said Agriculture Minister Cem Özdemir (Greens) at the end of the G7 meeting in Stuttgart. “We call for keeping the markets open.”
Meanwhile, India is no longer the only country to take such a step. According to the International Food Policy Research Institute in Washington, the number of countries that have imposed export restrictions on food has increased from three since the Russian invasion of Ukraine in mid-February more than 20 increased. The “Financial Times” reported on the evaluation in early May. Wheat, palm oil, corn, sunflower oil and soybeans were most frequently withheld.
In addition to the goal of national food security, the countries hope to reassure their populations in the face of rising food prices.
However, analysts had warned in advance that any restrictions on Indian exports would rock international markets. “The world is turning to India for alternative supplies at a time when global inventories are historically scarce and supplies from the Black Sea remain severely constrained,” said Kona Haque, ED’s director of research
The latest developments in India are therefore bad news for consumers. They have to be prepared for persistently high price increases – and in some parts of the world even fear and starve for their existence.
