More food inflation and it's because of Ukraine
The Biden White House is blaming Putin for gasoline prices. It's nonsense, but what else are these people supposed to do?
Regarding international food prices, the Russian invasion of Ukraine may have something to do with it. This is from Callista Gingrich, who was the United States ambassador to the Holy See from 2017 to 2020:
Russia is the leading exporter of wheat, while Ukraine is the fourth-largest exporter. Together, these countries account for nearly one-third of total wheat exports in the world.
Much of Russia's and Ukraine's wheat exports are sent to the Middle East and Africa[.] ...
In addition to wheat, Russia and Ukraine are large exporters of fertilizer. Russia, and its ally Belarus, account for 42 percent of all potash exports, which is used for producing fertilizer.
The supply disruptions from the war on Ukraine will particularly impact the agricultural sector in India -- one of the largest importers of fertilizer. India sources one-third of its potash from Russia and Belarus. Its agriculture sector is sizable and makes up 15 percent of the country's GDP and provides employment for 60 percent of its workforce.
India is one of the top producers of wheat and makes up five percent of global wheat exports. The U.S. Department of Agriculture reported that demand for India's wheat exports has grown since the invasion of Ukraine.
As Kip Tom, former U.S. Ambassador to the United Nations Agencies for Food and Agriculture, recently noted, though global traders are adept at "finding supplies and re-routing vessels to meet the need… this only functions if reserves of grain are available."
Insecure food and short supply in this period of disruption are not the only challenges to combatting the deepening hunger crisis. The rising costs of commodities are also a significant hurdle.
The skyrocketing price of oil impacts transportation costs, as well as production costs for farmers operating equipment and machinery. Additionally, on March 7, the cost of wheat surged and nearly tripled to nearly $13.00 per bushel.
These costs are ultimately passed on to consumers and aid organizations that provide assistance to those impacted by hunger...
As more than 3 million people flee Ukraine due to the conflict, we can expect the hunger crisis to impact more countries, as well as organizations oming to their aid. This humanitarian tragedy demands immediate attention and action to reduce the devastating effects of hunger around the world.
Wow. I had no idea that a war in Ukraine would impact the world's food supplies like this.
What can we do? Better put, what can we really do? We can export food to these countries, but I'm not really sure that we can replace the supplies.
Get ready for a lot of hunger, unhappy people, and a few wars as well. Also, keep an eye on the dollar price of a wheat bushel. It will become as relevant as the price of oil!
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Image: Henri Bergier.