Russia's War With Ukraine To Raise Wheat, Corn And Sunflower Oil Prices

Russia and Ukraine combine for nearly a third of the world’s wheat and barley exports. Ukraine is a major supplier of corn and the global leader in sunflower oil, which is used in food processing.

Photo Insert: Ukraine was Indonesia’s second-largest wheat supplier last year, providing 26% of wheat consumed. A wheat field in Ukraine

Russia’s invasion of Ukraine could reduce food supplies just when prices are at their highest levels since 2011, Joseph Wilson, Samy Magdy, Aya Batrawy and Chinedu Asadu reported for the Associated Press (AP).

Millions rely on subsidized bread made from Ukrainian grains to survive, with about a third of people living in poverty. War-ravaged Syria recently announced it would cut spending and ration staples.

In nearby Lebanon, authorities are scrambling to make up for a predicted wheat shortage, with Ukraine providing 60% of its supply. They are in talks with the US, India, and Canada to find other sources for a country already in a financial meltdown.

African countries imported agricultural products worth $4 billion from Russia in 2020, and about 90% was wheat, said Wandile Sihlobo, chief economist for the Agricultural Business Chamber of South Africa.

Ukraine was Indonesia’s second-largest wheat supplier last year, providing 26% of wheat consumed. Rising prices for noodles, in turn, would hurt lower-income people, said Kasan Muhri, who heads the trade ministry’s research division. Ukraine and Russia also combine for 75% of global sunflower oil exports, accounting for 10% of all cooking oils, IHS Markit said.

Farmers in the United States, the world’s leading corn exporter, and a major wheat supplier, are watching to see if US wheat exports spike. In the EU, farmers are concerned about rising costs for livestock feed.

Ukraine supplies the EU with just under 60% of its corn and nearly half of a key component in the grains needed to feed livestock.

Russia, which provides the EU with 40% of its natural gas needs, is similarly a major supplier of fertilizer, wheat, and other staples.

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