Michel Portier, director of Agritel, an analysis and consulting firm specializing in agricultural and agro-industrial markets, said on the evening of Friday, March 4, franceinfo said that with the war in Ukraine, food prices “are rising due to lack of short-term availability.”
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franceinfo: Why is France, which produces so many cereals, so affected?
Michael Porter: France is the first country to export wheat to the European Union, but prices and markets are completely globalized. Large buyers of wheat, starting in Egypt, had bought wheat for close delivery, which was to arrive between March and June, of Russian or Ukrainian origin. However, this origin cannot be blamed in the context of the war. They are therefore obliged to buy it on the international stage. There is no shortage of wheat in the world, but there is a problem with logistics. Ukraine had another 6 million tons of wheat for export by July, Russia had 8 million tons, which are in silos, but can not be transported! There is no longer a boat sailing on the Black Sea, so buyers are forced to look for another origin [pour le blé], including France. Prices are skyrocketing due to lack of short-term availability.
Can this price increase last for a long time?
You have to ask Mr Putin if this war will last long. It is extremely difficult to have medium-term and long-term forecasts. It is certain that prices will remain extremely high until the next harvest in the northern hemisphere for wheat and corn. Wheat prices will remain very high at least until July. Corn prices, as the harvest is a little later, will certainly remain extremely high until October. European corn, but especially American corn, has a major problem: we have European legislation banning the import of GMOs, while the United States is the world’s leading producer.
What are the consequences?
The first consequence for farmers is a very sharp rise in the cost of feeding livestock, while meat prices are falling. For consumers, I would say that the impact in stores should be relatively modest. Even if the price of wheat rises, it represents less than 10% of the price of baguette, for example. As far as livestock is concerned, prices for poultry and pork remain extremely low. I’m not very worried. Where, very clearly, there will be an impact on the consumer, this is on the oils. Ukraine alone exports 50% of the world market for sunflower oil. If we take the production of sunflower seeds in Ukraine and Russia, we reach 80% of world production. So there one day we will certainly turn to other oils.