Miller Magazine Issue 146 February 2022

The current tension between Russia-Ukraine has increased supply concerns in agricultural commodities, especially wheat and corn. Some experts warn that a possible hot war could cause a global food crisis. World food prices are already at the peak of the last 10 years due to the pandemic and climate change. A possible conflict between the two major grain-producing giants could disrupt the world's grain supply. This could further increase food prices. “If an invasion is unavoidable, governments around the world must be prepared to react quickly to avoid food insecurity and potential famine, including by sending food aid to needy countries and expediting supply chain shifts to redirect exports to Ukraine’s current customers,” said a Foreign Policy article on the ongoing tensions. Speaking to Wall Street Journal, Andrey Sizov, head of Russia-based consultancy SovEcon, said that even a limited conflict that doesn’t stray far from the Ukrainian-Russian border and only causes minor damage to Ukraine’s agricultural infrastructure could drive prices up between 10% and 20%. Noting that the risks have decreased in recent days, “It looks more and more like a diplomatic war, not a 'hot' war, and that is good for all parties involved,” Sizov adds. Russia and Ukraine together account for 29% of global wheat ex- ports. Russia, the world wheat export leader, sold 38.5 million tons of wheat last season. Russia is expected to supply more than 34 million wheat to global markets in the 2021-2022 season. Ukraine, which has climbed up the list of grain exporters in the last decade, aims to be the 3rd exporter in wheat and 4th in corn in the current season. It’s currently difficult to assess the scale of potential damage as food prices depend on a range of factors, according to Monika Tothova, an economist FAO. “The actual impact of the tensions will depend on how long the tensions will last and how they will develop. If there is a dete- rioration in the overall situation with a significant impact on production, export logistics, etc, the impact on the global wheat markets will be sizeable,” Tothova said in an interview with TASS. Wheat is in the headlines of the international media again due to the Russia-Ukraine crisis. The general opinion is that grain prices will con- tinue to be volatile due to the prolonged tension. editor Namık Kemal PARLAK millermagazine company/millermagazine millermagazine Parantez Publishing and Congress Ltd. Gökevler Mah. 2312 Sok. No:16/37 Ginza Corner Plaza, Esenyurt / İstanbul - TURKEY T. +90 212 347 31 64 F. +90 212 212 02 04 www.millermagazine.com info@millermagazine.com On Behalf of Parantez Publishing and Congress Ltd., Owner Zübeyde Kavraz Responsible Manager Namık Kemal Parlak Editor-in-Chief Namık Kemal Parlak Editors Mustafa Yağmurlu Cemalettin Kanaş Sales and Marketing Burcu Çetin Ebru Ildan Sevin Art Director and Visual Design Alparslan Murat Aysu Corporate Communications Ahmet Hamdi Annaç Consultancy Board Ali İhsan Özkaşıkçı, Chairman of AUSD Mesut Çakmak, Chairman of GUSAD Erhan Özmen, GUSAD Honorary Chairman Bekir Bağış, Chairman of Çukurova Flour Industrialists Association Hasan Özmermer, Board Member of Özmermer Flour Derviş Toprak Mehmet Şerif Gültay Referee and Scientific Advisory Board Prof. Dr. Mustafa Bayram Prof. Gustavo Sosa Prof. Dr. Hazım Özkaya Prof. Dr. Harun Dıraman Asst. Prof. M. Kürşat Demir Asst. Prof. Halef Dizlek Asst. Prof. Mustafa Erbaş Publication Type Periodic (Monthly) Printing - Baskı İhlas Gazetecilik A.Ş. Merkez Mah. 29 Ekim Cad. No: 11 A 41 Yenibosna-Bahçelievler-İstanbul Tel: 0212 454 30 00 All copyrights belong to Parantez Publishing. © May not be used without permission. Responsibility of the ads belongs to the advertisers. ISSN 2718-031X COPYRIGHT PAGE The impact of Russia-Ukraine tension on grain markets