Russia-Ukraine War: Impact on Agriculture Economyby O'AgriFarm Platform Largest Agri Fulfilment Platform
The Russian-Ukrainian war has wreaked havoc on so many aspects of the global economy. Today we will analyze the effects the Russian-Ukrainian war has on the global agricultural economy.
What are the prime imports and exports of Russia and Ukraine?
To analyze the effect of the Russian-Ukrainian war on the global agricultural economy, we will first have to see what are Russia and Ukraine's influence on the global agricultural economy.
Prior to 2014, Russia had a huge influence on the EU trade agreements.
Russia was the fifth largest agricultural importer of EU goods.
Russia also has a major global stand as an exporter of several important agricultural goods like wheat, sunflower oil, and barley.
Russia is also the world’s largest wheat exporter, supplying almost a quarter of the world’s total exports in 2017-18.
In 2013 Russia was also predominant in the raw stock exports. Goods like meat, egg, and dairy products were a staple export from Russia.
Ukraine has already been going through a recession since the early 2010s. But in 2012, preliminary research showed that 2012, Ukraine had seen substantial growth in its agricultural sector.
Ukraine clawed its way to the top to become a competitor for the US Agri export industry.
Ukraine had a 3% growth in corn usage rate. This is higher than the national growth rate for corn harvest. This leaves a huge margin for Ukraine to export its excess corn.
Ukraine is also commonly known as the breadbasket of Europe. They are known exporters of wheat and rapeseed.
In the early 2010s, Ukraine had sanctioned large tracts of land to be turned into corn and soybean farms. This was done in response to China, UAE, and Africa’s growing demands for corn and soybeans.
Now that we know the influence of Russia and Ukraine on the global agricultural economy, we will take a look at how the Russian-Ukrainian war has affected the global agricultural economy.
The effects of the Russian-Ukrainian war on the agricultural economy.
There are several factors that determine the smooth functioning of the global agricultural economy. According to Bourlakis and Weightman, there are six key factors in the global food supply chain. They are Quality, Technology, Logistics, Information Technology, Regulations, and Consumers.
During the war, a few of these factors had to take a beating. Stated below are just some points about the ramifications of the Russian-Ukrainian war on the global agricultural economy.
The grain silos in Ukraine, though filled to the brim with high-quality grains like wheat and corn. But because of the lack of buyers, the grains are not seeing the light of day, and are at risk of getting spoilt.
Many international food companies are conflicted on how to do business in these war-torn regions and have therefore either reduced their capacity for doing business with these regions, or have suspended business for the time being.
Sanctions have been imposed and countries around the world have suspended imports from Russia. This means that major crops like wheat and barley supply will take a hit.
Many non-EU nations rely on wheat and corn supply from Ukraine. But with most Ukrainian efforts being directed towards self-preservation and not supply maintenance, these countries are suddenly left with no steady supplier of wheat or corn.
Countries like Vietnam, Indonesia, and India are trying to step up to the plate to fill in the vacuum created by the Russian import bans and the Ukrainian wheat and corn supply cessation.
The most immediate and likely effect of the Russian-Ukrainian war on the global agricultural chain would be the rise in food prices. This could worsen in the coming months if the war escalates and foreign intervention begins. Check the latest Agri commodity price in India:-https://www.oagrifarm.com/product-prices
Created on Apr 26th 2022 02:48. Viewed 175 times.