10 April, 2022
Ukraine is one of the world’s top exporters of corn, sunflower oil, and wheat. Disruptions stemming from Russia’s invasion of Ukraine have stoked fears the war-torn country could experience a 50% decline in crop output this year, according to Bloomberg.
Forecast data from ag expert UkrAgroConsult show Ukraine’s corn output could be as low as 19 million tons, about half of last year’s 41 million tons.
UkrAgroConsult’s pessimistic outlook follows huge production uncertainties as farmers experience shortages of diesel and fertilizer and bombed-out infrastructure.
The outlooks of two other ag firms aren’t as gloomy. Black Sea research firm SovEcon expects Ukraine’s 2022 corn harvest to be 27.7 million tons, and Barva Invest’s outlook is 29.5 million tons. Both a far below 2021 totals.
Maxigrain analyst Elena Neroba warned if farmers don’t have diesel, they “can’t plant huge hectares.”
“Some farmers still don’t have access to seeds and fertilizers. Even if they already paid for them, the delivery supply chain doesn’t work as well as it should,” Neroba said.
Regardless of how much the conflict impacts output, global food prices have never risen so fast and have never been so high in anticipation of food shortages worldwide.
In March, global food prices jumped a stunning 12.64% MoM – almost double the previous record monthly surge…
Prices have exceeded levels only seen during the inflation riots of 2010/11, known as Arab Spring.
Breaking down export numbers, Ukraine produced 49.6% of global sunflower oil, 15.3% of global maize, 12.6% of global barley, and about 10% of global wheat.
Rather than planting, some Ukrainian farmers are stealing Russian tanks and selling them to the government.
We’ve already pointed out that food inflation riots are underway and may continue to spread throughout emerging market economies.
The bad news is that the world’s hunger problem isn’t going away and may only worsen. The anticipation of Ukraine’s crops evaporating from the global food supply will exacerbate the incoming food crisis. Food supplies may plunge next year as harvests will result in lower production, which may force food prices even higher.
The world could be on the cusp of a multi-year food crisis. It’s never been a better time to start growing your own garden.