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Supply Chain

Russia's Ukraine Invasion To Impact Grain Trade, Prices

The invasion of Ukraine by Russia will have a major impact on international trade and prices of energy, agricultural products, fertilisers and transport, with grain farmers having to deal with major upheavals, French cereal farmers’ association AGPB has said.

Short-term impact will centre around severe disruption in agricultural and industrial production in Ukraine, as well as exports and imports.

It will also impact Belarus and Russia, as foreign trade could be disrupted by political decisions, AGPB noted.

International sanctions and efforts to limit domestic inflation will lead to a decline in Russian exports of gas, oil, fertilisers and cereals.

AGPB (General Association of Wheat and Other Cereals Producers) is a body that represents French producers of straw cereals, such as wheat, barley, oats, rye, sorghum, among others.

Read More: EuroCommerce: Retail And Wholesale Industry Will 'Do All It Can' To Assist Ukraine

Impact On Europe

The increase in prices for nitrogen fertilisers, gas and maize could be higher for Europe, the association noted.

EU meets 30% of its fertiliser requirements through imports from Russia.

In case the EU or Russia decide to halt fertiliser trade, it would lead to a shortage of nitrogen fertilisers.

Russia also supplies 50% of its natural gas requirements and if it chooses to reduce exports, energy prices will rise in the continent.

AGPB also noted that if the EU could decide to impose an embargo on its grain imports from Russia.

Moreover, imports of maize from Ukraine to the EU will also be impacted.

Overall, the effect of the crisis on prices and markets is likely to be unfavourable for European cereal farmers, while it will penalize importers from developing countries, AGBP noted.

© 2022 European Supermarket Magazine – your source for the latest Supply Chain news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.

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