The tons of grain not leaving Ukraine are forcing many countries to seek other suppliers, restructure national production and adopt a price increase that affects all products
Putin’s new secret weapon to pressure Europe is grain. And not alone, but he is toying with the blockade of the port of Odessa, from which Ukraine exports millions of tons a year to try to rob the 400 million people who depend on Ukrainian grain in the world. Spain will soon feel the lack of grain. Our country harvests 25.4 million tons of grain per year, but the Spaniards consume 36, which makes us a net importer of grain.
So is the solution to grow more? It’s not that easy. Brussels has opened its hands to cultivate the land it was forced to keep fallow, but it is only about 600,000 hectares of which it is not even known whether farmers will finally want to work due to rising production costs. “Cultivating fallow land means more rotation of the land, which depletes it for new crops, and you also need more fertilizers and probably at the current prices it’s not profitable with the low margins they usually have,” said Juan Carlos Higueras, an expert professor of agriculture. -food sector at EAE Business School.
And despite the increasing demand, small farmers and ranchers will not benefit from it, on the contrary, because they become the weakest link in the chain. Fertilizers have risen in price, as has energy and what to say about fuels. Farmers, meanwhile, pay much more expensive feed for their animals, which in turn increases meat prices. Higueras predicts that after the summer there will be a shortage of chicken meat in supermarkets because it is animals that eat a lot of grain and farmers are already making losses, which “will reduce production and sharply increase prices”.
The PAC, for its part, also admitted to the temporary easing of phytosanitary requirements (insecticides) for grain imports from previously much more heavily monitored countries, such as Argentina and Brazil. Something that will “dampen” the effect of the lack of Ukrainian grain, but will not cover all autumn, adding the prices at which this product is imported from the other side of the world, with cargo ships crossing the Atlantic .
In 2021, when only Putin knew that the invasion would take place a few months later, Spain mainly imported grains from France, Ukraine and Brazil, with a total purchase volume of 3,343 million euros. But the conflict broke out and changed the whole picture. While our country positioned Ukraine as the main supplier of grains in January and February (respectively 222.5 and 198 million euros), with purchases from France almost doubling, the downward trend started in March that ended the month of April with only 5 million euros. euro Ukrainian grain imports. Of the Exporters Club, its president, Antonio Bonet, notes that since the beginning of the 21st century, Ukraine has become, together with France, the main supplier of this product for Spain, alternating between the first and second positions.
The curious thing is that despite the fact that Spain produces less than it needs for consumption, it also focuses on the export of grains, albeit in very small quantities. In 2021, for example, the country sold about 451 million euros of grain. The Exporters Club indicates that it was mainly destined for Portugal (22%), France (16%), Belgium, the United Kingdom, Algeria and the United States. But the outbreak of the war also dampened exports, resulting in more product being saved for national consumption: from 77.1 million euros in turnover in February to 66 million in April.
This is because not all countries produce the same grains. Spain has many crops of barley (43% of total production) and common wheat, while having to import practically all the maize it consumes, with 510 million euros bought from Ukraine alone in 2021 from this grain, 93% of all what you buy them.
And what consequences does all this have for consumers? With even stronger price increases for the rest of the year. “All flour-based products, such as pasta, pastries, bread, pizzas… will become more expensive in the coming months,” confirms the EAE Business School expert. The data is clear: according to Gelt’s latest report, staple foods rose five times the pace of headline inflation from April to May. For its part, the consultancy Kantar warned in a study published this week that 4% of Spanish households can no longer afford to buy even the most basic food in the shopping cart.
If the evolution since 2021 is observed, there was already an increase in agricultural food, which an Allianz report calculates at 31%, something that has blown the war, and predicts that they will increase by another 23% in 2022 as a result of the increase in inputs (fuel, electricity, fertilizers…).
And the worst news is that despite the increase in these foods, the study calculates that retail prices have adjusted by 6%, meaning that less than half of the increase in producer prices has been passed on to the final consumer.
Now that the ports are closed, Ukraine is collecting 25 million tons of grain from the previous crop, but it is very difficult to bring it to market. European countries have started to publicize and distribute this commodity, and Spain is leading the start-up of a project to bring 8,000 tons of grain from Ukraine from July to September.
The initiative, in collaboration with France, Luxembourg and Poland, consists of transporting the grain by train to Spain, where it can be stored in silos in different ports on the Mediterranean coast such as Barcelona, Cartagena or Tarragona and from there the can be shipped to your destination country.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
