Filenews 1 March 2022 - by Angelos Nikolaou
There is a risk of a further surge in food prices following Russia's invasion of Ukraine and the problems arising from their inability to serve as giants the export of grain to the world market. Closed for exports is as of today and the market of Moldova, from which Cypriot traders procure corn and wheat.
A Cypriot company that would procure grain from Moldova has already been informed of the cancellation of the cargo. At the same time, things are not disappointing at the moment because it seems that the prices of products have risen, but they are not inaccessible. Specifically, traders looking for new markets for the supply of corn found that in Romania the price rose 4% to €6.87 per bushel, and therefore if they proceed to an order they will make it available to farmers at €330 euros per ton, from €317 today.
The Ministry of Agriculture is monitoring what is happening and has drawn up the basic principles of an action plan. Yesterday the first caretaker meeting was held on the subject to assess the situation and today the threshold of the Ministry of Agriculture will be crossed by grain traders to discuss the whole issue. If necessary, the Minister of Agriculture will submit proposals to the Council of Ministers that will meet next Thursday for immediate measures. The aim of the Ministry of Agriculture is for no livestock unit to be left without animal feed due to the war.
According to the Minister of Agriculture, Costas Kadis, there is a specific plan, which will be implemented depending on developments. He said there could be an increase in cereal prices if Ukraine and Russia are excluded from the market and Cyprus is forced to move to other markets. Mr. Kadis assured that the uninterrupted supply of cereals to Cyprus will be ensured for all needs.
Through the recording of the available stocks it was found that at this stage they cover the needs of our livestock farming for about 45 days (12%). An action plan will be drawn up in consultation with feed importers in order to try to allocate the available quantities rationally. Furthermore, there will be an investigation of the intentions of the importers, taking into account the uncertainty that prevails in the market, for the order of new cargoes per item / date of loading / price, etc. At the same time, the Ministry of Agriculture will explore the possibility of using the provisions of the legislation for the import of cereals by the State, due to the critical conditions prevailing.
At yesterday's meeting it was mentioned that the needs of Cyprus in cereals for animal feed are around 650,000 tons mainly barley and corn. 90% of the needs are covered by imports mainly from Romania and Bulgaria, Ukraine, due to a free trade agreement with the EU and Moldova via a Ukrainian port. No import duty is imposed on all four countries.
Russia is the first country in the world's grain exports and Ukraine the fifth. In the export destinations of Ukraine the first places are held by Indonesia and Egypt.
The war situation in Ukraine may cause a supply restriction due to a power cut from the closure of ports and the closure of other transport infrastructure. At the same time, there is the possibility of destroying grain stocks from hostilities, but also of influencing the new harvest by various factors (limited cultivation care, destruction of infrastructure, restriction of the workforce, etc.)
The possible effects are already leading to an increase in prices, in the European Market +1.5% for corn and +4% for barley and the International Market for +3% corn and +4.7% barley. If the higher transport costs due to an increase in fuel are also taken into account, then the increase at the time of arrival of the products will be even greater.
