Global food prices dip slightly from record highs as Ukrainian exports thwart; and global wheat variables are changing • Agriculture Policy News

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Bloomberg writer Megan Durisin reported on Friday that “Global food prices hold near record high as crop trade is disrupted by war in Ukraine, exacerbating supply shortages and fueling inflation.

The Russian invasion reduced Ukraine’s exports to a trickle, curtailing supplies to one of the world’s largest grain and vegetable oil shippers. This has sent buyers flocking elsewhere, while some countries are set to restrict sales as they worry about depleting local supplies.

“The high prices of fertilizers and weather worries heighten the threat to the global supply of crops, including drought curbs US wheat harvest. This risks aggravating a worsening hunger crisis. The United Nations Food Index fell by less than 1% in Aprilstanding near an all-time high.

Also on Friday, Dow Jones writer Yusuf Khan reported that “Food prices in April fell from an all-time high in Marchas a drop in vegetable oil prices managed to slightly cushion the effects of the war in Ukraine and supply chain problems around the world, according to the Food and Agriculture Organization of the United Nations.

The FAO Food Price Index, a measure of the most commonly traded food commodities, fell slightly to 158.5 points in April, from the March record of 159.3 points. The April figure marks a 0.8% reduction in prices over the month, but was still 30% higher than April 2021.”

Meanwhile, Reuters writer Pavel Polityuk reported late last week that “Ukraine imposed temporary restrictions on the supply of grain shipments by rail in the direction of Moldova and Romania due to a large number of wagons at border crossings, consulting firm APK-Infrom said on Friday.

“After its Black Sea ports were blocked by Russia, Ukraine was forced to use rail as main grain export routewhich often leads to the accumulation of wagons at border crossings.

“Previously, Kyiv suspended grain exports by rail to Poland.”

The Reuters article noted that “the Ministry of Agriculture said on Thursday that grain exports reached 46 million tonnes in Season July-June 2021/22including 132,000 tonnes so far in May.

A separate Reuters article last week reported that “A UN food agency official said on Friday that nearly 25 million tonnes of grain were blocked in Ukraine and unable to leave the country due to infrastructure problems and blocked ports in the Black Sea.

And, Reuters writer Pavel Polityuk reported last week that “Ukraine hopes to increase its export capacity by 50% in the coming months by expanding facilities on its western border, but it will still be well below pre-war levels, the deputy minister of infrastructure said Friday.

“Ukraine, a major world grain producer and exporter, has sharply reduced its grain exports from the beginning of the Russian invasion to about 1 million tonnes in April from up to 6 million tons before the war,” the article said.

New York Times writers Marc Santora, Cora Engelbrecht and Michael Levenson reported in Saturday’s newspaper that “The United Nations said on Friday that there was growing evidence that Russian troops had looted tons of Ukrainian grain and destroyed grain storage facilitiesadding to an export disruption that has already caused world prices to soar, with devastating consequences for poor countries.

In other news, Bloomberg writers Pratik Parija and Bibhudatta Pradhan reported last week that “A growing threat to food security is poised to push India’s Prime Minister Narendra Modi in enigma: continue sending wheat to countries affected by declining supplies of the war in Ukraine or store food at home to stave off high inflation.

“Severe heat waves have damaged wheat yields across the South Asian country, prompting the government consider export restrictions, reported Bloomberg News. While the Food Ministry has said it does not yet see a case for controlling wheat exports, it is an issue that will gain momentum and have political ramifications for Modi and his ruling party, the Bharatiya Janata.

The article noted that “Franck Gbaguidi, principal analyst at political risk consultancy Eurasia Group, said crop damage will limit India’s ability to meet wider supply shortages whether exports grow or not. Wheat consumption in the world’s second most populous country is estimated at 107.9 million tonnes, according to the US Department of Agriculture.

And Bloomberg writer Eamon Akil Farhat reported today that “global wheat prices are so high that African consumers are starting to drop cereals from their diets.

“As Wheat Prices Soar, Africa Turns to Cheaper Alternatives,” by Eamon Akil Farhat. Bloomberg News (May 8, 2022).

“Food producers in Kenya, Egypt, Democratic Republic of Congo, Nigeria and Cameroon say they mix cheaper alternatives in their breads, pastries and pasta. Local rice, cassava flour and sorghum are replace wheatwhich has soared about 40% this year as the Russian invasion reduced exports from Ukraine, one of the biggest shippers.

And Reuters writer Nicolas Misculin reported on Friday that “Australia and New Zealand to have approved the sale and use of food containing so-called HB4 wheat, a genetically modified (GMO) variety developed by the Argentine company Bioceres to resist drought and herbicides, the company announced on Friday.

Argentinaone of the largest wheat exporters in the world, was the first country to approve GMO wheat in 2020, followed by Brazil in 2021, a trend that could continue if global supply is further constrained by Russia’s invasion of Ukraine.”

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