A baker fills the shelves with bread at the Eastern Market in Washington on February 11. Russia’s invasion of Ukraine, one of the world’s breadbaskets, has driven wheat prices to a 14-year high, forcing bread consumers to eat up the price. (Brendan McDermid, Reuters)
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WINNIPEG, Canada. The Russian invasion of Ukraine, one of the world’s breadbaskets, sent wheat prices to a 14-year high, leaving bread consumers to swallow the price.
The Russian invasion on February 24 severely hampered trade from the Black Sea ports, raising global benchmark wheat prices in Chicago by 40% and further pushing global food inflation, which was already the highest in a decade.
Supply disruptions from Russia and Ukraine, which together account for 30% of global wheat exports and 20% of corn exports, will undermine the food security of millions of people, with the Middle East and North Africa particularly vulnerable due to their dependence on imports, the report said. message. Julie Marshall, representative of the World Food Program.
Oil and gas prices have also risen due to sanctions against Russia, while the cost of freight and raw materials such as steel have already skyrocketed due to pandemic-related supply chain disruptions.
Even consumers in two of the world’s largest wheat-growing countries, Canada and the United States, are paying the price.
“Unfortunately, in the short to medium term, food inflation and the cost of baked goods in the United States will rise even more. This will most affect the most vulnerable in our society,” said Robb McKee, president and CEO of the American Bakers Association.
In the weeks leading up to the latest spike in wheat prices, Calgary, an Italian bakery in Alberta, raised prices by 7% to keep up with costs related to last year’s drought in Canada and price inflation in flour and yeast.
Now Louis Bontorin, co-owner of the 60-year-old family business, fears he will have to hike prices again once he runs out of his flour supplies for four to five months.
“It can be very, very devastating,” Bontorin said. “Bread is one of the basics, the essentials, and that’s the hard part. You’re trying to just take what you need, but you’re also aware of the impact (higher price) has on the consumer.
“Everyone’s purchasing power is simply undermined.”
The threat to wheat supplies due to Russia’s invasion of Ukraine is exacerbated by falling global stocks of major exporters.
According to the International Grains Council, shipments to the European Union, Russia, the United States, Canada, Ukraine, Argentina, Australia and Kazakhstan will fall to a nine-year low of 57 million tons by the end of the 2021/22 season. .
“Pay the cost or don’t get your flour”
Some mills last fall signed contracts with farmers for the wheat they currently use, insulating them for the time being from surges associated with the Russian-Ukrainian war. But one miller said that once he faced these higher costs, he would have to pass them on to the bakers who buy his flour.
“It will be a must. Either pay more or don’t get the flour,” said the miller, who asked not to be named because of the delicacy of the situation. “I don’t think the general population has any idea what the consequences are going to be.”
After the Russian invasion, Rogers Foods President Joe Girdner’s phone caught fire. Bakers who buy flour from his two factories in British Columbia are now looking to secure supplies further than before, fearing prices could rise even more.
This is also a problem for the miller. Spring wheat stocks were already depleted due to last year’s drought, Girdner said, and global buyers who depended on supplies from the Black Sea can now turn to Canada for wheat and compete with local mills.
“It’s a really big problem,” Girdner said of the Russian-Ukrainian war. “And the real story will be if this situation drags on.”
Participation: Julie Ingversen
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