While rapidly rising gasoline prices have –rightly – gotten a lot of attention, the other global commodity that’s quickly becoming a casualty of Russia’s invasion of Ukraine is wheat.
As Reuters reports, the effects of taking both Russian and Ukrainian wheat off the market could result in prices spikes around the world. And in some parts of the globe, the effects could be far worse:
Stocks in major wheat exporters – the European Union, Russia, the United States, Canada, Ukraine, Argentina, Australia and Kazakhstan – are set to fall to a nine-year low of 57 million tonnes by the end of the 2021/22 season, International Grains Council (IGC) data shows.
They now account for just one-fifth of global inventories and, with world consumption expected to total 781 million tonnes, that would feed the world for just 27 days.
If Russia and Ukraine are excluded, other major exporters account for 16% of global stocks or enough wheat to feed the world for less than three weeks.
“You need to look at what’s available,” Dan Basse, president of Chicago-based consultancy AgResource, said of wheat stocks. “If someone has a problem, there is surely not enough supply.”
And not enough supply means two things: higher prices (which are already occurring) and the possibility of shortages, which can led to political unrest.