Wheat prices will likely jump as much as 7.2 per cent over the next year as the Russia-Ukraine war continues, new research shows.
Australia could help reduce the supply gap created by the war and trade sanctions on Russia – which exported more than a quarter of the world’s wheat before the war – by increasing wheat exports by 9.4 per cent and crop areas by 1 per cent, a paper published inGrain supplies from Russia accounted for about a quarter of the world’s wheat supply before the war.in February, as both countries are major global producers of maize and wheat.
If crop exports from Ukraine completely stopped, wheat prices would jump 3.6 per cent over the next year, they predicted. Russian crop exports reducing by 50 per cent on top of this, whether because of sanctions or other causes, would mean these increases grow to 7.2 per cent.This could be lessened to a 3.5 per cent price increase if the European Union and United States reduced their use of biofuels by 50 per cent, as that would mean demand for grains such as maize and rapeseed would drop.
They predicted that other countries would continue ramping up their grain exports if supply from Russia and Ukraine kept dropping, however, as well as relying on other food such as rice more.This meant the price increases were not as severe as they could be, falling short of the war-induced 8-22 per cent surge in food prices predicted by the United Nations in March.
However, the researchers warned that their analysis presumed countries would be able to respond to price signals by increasing production and trade, which drought in South America, high fertiliser costs and limits on exports in major grain producing countries such as Argentina and Indonesia could compromise.
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