Winnipeg, Manitoba — Russia’s invasion of Ukraine, one of the world’s breadbasket countries, has forced wheat prices to rise for the first time in 14 years, forcing bread consumers to eat up their costs. rice field.
Russia’s February 24 invasion severely disrupted trade from the Black Sea harbor, boosting Chicago’s global benchmark wheat prices by 40% and further boosting global food inflation, which was already the highest in the last decade. rice field.
Supply disruptions from Russia and Ukraine, which account for 30% of the world’s wheat exports and 20% of corn exports, have eroded the food security of millions of people, with the Middle East and North Africa dependent on imports. He said it was particularly vulnerable. Julie Marshall, spokesperson for the World Food Program.
Sanctions against Russia have also caused oil and gas prices to skyrocket, but pandemic-related supply chain disruptions have already soared the cost of raw materials such as freight and steel.
Even consumers in Canada and the United States, two of the world’s largest wheat producers, are paying the price.
“Unfortunately, in the short and medium term, food inflation in the United States and the cost of baked goods will rise further. This will have the greatest impact on the most vulnerable people in our society,” said American Bread. Rob McKee, Chairman and Chief Executive Officer of the Shop Association, said.
A few weeks before the latest wheat price surge, Calgary Italian Bakery in Alberta raised prices by 7% to address the costs associated with last year’s Canadian drought and inflation in flour and yeast prices. ..
Louis Bontorin, now a 60-year-old family partner, fears that if he runs out of flour supplies for four to five months, he may need to raise prices again.
“This may be really, really devastating,” Bontorin said. “Bread is one of the basics, a necessity and a difficult part. You are trying to get only what you need, but what impact (higher price) will it have on consumers? I am also aware of.
“Everyone’s purchasing power is declining.”
The threat to wheat supply from Russia’s invasion of Ukraine was exacerbated by the decline in global inventories of major exporters.
Supply in the European Union, Russia, the United States, Canada, Ukraine, Argentina, Australia and Kazakhstan is expected to drop to a minimum of 57 million tonnes in nine years by the end of the 2021/22 season. IGC) Data shows.
“Pay the cost or don’t get the flour”
Some factories signed contracts with farmers about the wheat they are currently using last fall, isolating them from the surge associated with the war between Russia and Ukraine so far.
After Russia’s invasion, Rogers Foods President Joe Gardner’s phone began to light up. Bakers buying flour from two British Columbia factories are trying to secure more supplies than ever before, fearing prices could rise further.
It’s also a problem for millers. Due to last year’s drought, the supply of spring wheat is already in short supply, and global buyers who depended on the Black Sea supply could head to Canada for wheat and compete with domestic gristmills, Gardner said. He said.
“That’s a really big concern,” Gildner said of the war between Russia and Ukraine. “And the real story is whether this situation will last.”