The Russian invasion of Ukraine has significantly disturbed global agricultural markets, particularly as Russia and Ukraine have been major exporters of grains, wheat, maize, oilseeds (particularly sunflowers) and fertilisers. This has added further instability to markets, resulting in sharp price rises for key agricultural products and inputs.
Russia on Thursday began shipping grain from Ukraine’s occupied territory, with a vessel carrying 7,000 tons of cereal sailing from Ukraine’s occupied port of Berdyansk.
In the first quarter of 2022 (Q1 2022), the average price of goods and services currently consumed in agriculture (i.e. inputs not related to investment) increased by 9.5% compared with the fourth quarter of 2021 (Q4 2021), underpinned by strong rises for fertilisers and soil improvers (+21.2%), energy and lubricants (+17.4%) and animal feedingstuffs (+9.2%). Meanwhile, the average price of agricultural goods as a whole (output) increased by 6.0%.
Russia insists that it will let Ukraine ship its grain if Kyiv forces demine sea lanes.
Kyiv fears Russia will launch an attack on Ukraine’s Black Sea coast.
This information comes from data on agricultural price indices published by Eurostat today.
The latest quarterly price rises build on increases since the start of Q1 2021. On an annual basis, the average price of agricultural inputs not related to investment jumped by 27.4% for the EU between the Q1 2021 and Q1 2022. In particular, the price of fertiliser and soil improvers almost doubled on average in the EU (+96.2%), and the average price of energy and lubricants rose by just over one half (+55.6%). The higher cost of cereals and energy also passed through to animal feedingstuffs (+22.9%).
The average price of agricultural output increased by 19.9% for the EU between the Q1 2021 and Q1 2022. There were particularly strong price increases for cereals (on average +41.5%), and oilseeds (+51.7%), as well as cattle (+24.2%), poultry (+22.2%) and milk (+21.4%), among others.
Among the EU Member States, the largest rate of increase in the average price of agricultural output was recorded in Lithuania (+18.1% in the first quarter of 2022 compared with the fourth quarter of 2021), followed by Romania (+14.4%) and the Netherlands (+13.9%). Croatia (-5.8%, driven by the fall in the price of forage plants), Slovakia (-0.8%) and Greece (-0.4%) were the only countries with a price index decrease in this period.
Russia, the largest wheat exporter in the world, has said it is facing difficulties in exporting its own grain due to unprecedented Western sanctions over its intervention in Ukraine.
The sharpest rate of increase in the average price of inputs not related to investment was also recorded in Lithuania (+24.5%), followed by Latvia (+18.9%) and Slovakia (+14.6%). All Member States recorded rises, but the smallest rates of increase were in Malta (+4.7%), Slovenia and Portugal (both +6.2%).
New York Times: Russia has bombed, blockaded and plundered the grain production capacity of Ukraine, which accounts for one-tenth of global wheat exports, resulting in dire forecasts of increased hunger and of spiking food prices around the world. Now, the United States has warned that the Kremlin is trying to profit from that plunder by selling stolen wheat to drought-stricken countries in Africa, some facing possible famine.