The agri-food crisis worsens after seven months of war in Ukraine

The crisis in agriculture and food due to the war in Ukraine is getting worse and exceeds the forecasts from the beginning of the conflict, seven months ago, and while in Spain it manifests itself in the rise in prices in other areas of the world, the catering.

The Russian invasion, on February 24, set off alarms in world agricultural trade and, to date, sources from the Spanish agricultural sector conclude, in statements to Efeagro, that many of those fears of the start of the war have confirmed, although at the moment there is an offer.

In Spain, the impact is felt in the pockets of citizens when paying for food as a result of inflation and the cost of cereals, fertilizers or energy.

But in other latitudes, food is scarce due to the war between two large producers - Russia and Ukraine - and due to natural disasters, as the UN, the International Monetary Fund and other organizations have warned this week.

In Brussels, the agriculture ministers of the European Union (EU) will discuss on Monday Ukraine and the operation of the maritime routes through which it exports cereals.

agrarian balance

The director of Agrifood Cooperatives, Gabriel Trenzado, affirms that the forecasts of seven months ago regarding inflation have been fulfilled, but "there has not been the catastrophic impact that was feared" in the offer.

However, he has pointed out that this danger continues to exist, due to other factors such as the drought, which will reduce harvests and add pressure on the markets.

The agrarian organizations, the merchants and the cooperatives agree that the rise in agricultural costs already came from before the conflict.

But the war "has broken the camel's back", according to the general secretary of the Accoe business association, José Manuel Álvarez, who believes that if there had been no Russian invasion, the "tension" in grain prices would not have lasted for so many months.

The technical director of COAG, José Luis Miguel, has indicated that at the end of 2021 the Spanish field registered a year-on-year increase in costs of 30% while now that indicator rises to 40%, which proves that the crisis "came from behind ».

Gap of Ukraine and Russia

Ukraine is the first supplier of corn to Spain and the fourth world exporter, while Russia is the second global exporter of wheat (counting the EU as the first block) and Ukraine the fifth.

Spain is deficient in cereals, soybeans for feed and sunflower, cultivation that Ukraine leads worldwide.

Faced with the gap left by Ukraine, Spain turned to other origins such as Brazil or the US.

International reports indicate that there is a "more than sufficient world production" of cereal, but the problem of shortages is in the countries that cannot pay more expensive grain, Álvarez has opined.

Among the customers of the cereal from Russia and Ukraine, nations from Africa and the Middle East stand out.

Fewer plantings and farm closures

The prolongation of the war generates doubts about the future of Spanish production.

The director of International Relations of the agrarian organization Asaja, Ignacio López, assures that the consequences "have worsened" and that the conflict has given "the lace" to the producer, who has not seen his remuneration rise either despite the fact that citizens buy the more expensive food.

López mentions the abandonment of farms and the need for many ranchers to slaughter their animals.

This circumstance may lower the 2023 harvests, which López adds to the doubts of many farmers about whether or not to sow due to the weather or the uncertainty about the regulations of the future Common Agricultural Policy (CAP).

The COAG representative has also cited the reduction of fertilizers in the field, as a result of their prices, while in more intensive productions such as vegetables, "the financial risk" increases.

How is the field adapted? 

López has pointed out that farmers have adapted as best they can, adjusting their expenses to these seven months in which their bills have "tripled" and redirecting their crops to those that require less water.

Agricultural companies look for other suppliers to supply themselves with raw materials but, points out the director of Cooperatives, it is not easy to change from one year to another from a traditional supplier, nor is it easy to adapt farms to the use of renewable energies.

"This experience will cause the strategic plans of the companies to change in the future," according to Trenzado, alluding to the fact that they will not be able to count on the same grain or energy supply forecast.

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