Ukraine war
Ukraine is the “breadbasket of Europe” – what war means for wheat prices and supplies
Blue above, gold below: Wheat is not only visually reminiscent of the flag of Ukraine, it is an important export commodity for the country.
© Iaroslav Danylchenko/ / Picture Alliance
Ukraine is one of the top wheat exporters in the world. The war in Ukraine also affects cultivation and harvesting. The Grain, Milling and Starch Industry Association explains what this means for the consumer.
In January, the wheat price was around 275 euros per ton. That was a lot. Since then he has known only one direction: upwards. A ton currently costs almost 450 euros, an increase of more than 60 percent in a few weeks and a price that has not existed for at least 15 years.
The war in Ukraine is responsible for this: Both parties involved, Russia and Ukraine, are important export countries for grain and especially wheat. What consumers can expect in the next few weeks has dem stern dr Peter Haarbeck, Managing Director of the Grain, Milling and Starch Industry Association (VGMS), answered.
War in Ukraine: There is no threat of a wheat shortage in Germany
At least one partially reassuring fact can Dr. Haarbeck: The local mills buy 95 percent of their grain from Germany, while Russia and the Ukraine deliver “virtually no grain” to Germany. A direct shortage due to canceled supply contracts will probably not occur or only to a small extent.
Not just because of the Ukraine war: why the price of wheat is exploding
However, this is irrelevant for the second key question, the price: if large market participants fail or cannot deliver as much as usual, this drives the price up. After all, many people still want to buy bread and rolls or feed their cattle. When supply goes down, competition increases and customers have to pay more to get their grain.
We are currently seeing this in the wheat price in two respects: Firstly, because of the war in Ukraine. And secondly, because the current crisis is encountering an “already very tense situation on the grain markets”, as the VGMS explains. Everywhere in the world less than usual was harvested, the warehouses were just full, certain grain qualities were difficult to obtain in Germany and states wanted to stock up on grain right now in order to get through difficult times. The result: as early as November there were stock market listings of 310 euros.
Rising wheat prices: where things are getting particularly expensive for consumers now
The VGMS gives a rule of thumb for consumer prices: The less processed the products are and the greater the proportion of grain in the food, the more closely the consumer prices for food made from grain depend on the raw material prices.
In the case of pasta, for example, which consists exclusively of durum wheat semolina, water and salt, the price is particularly dependent on the price of the starting products. If the price of durum wheat increases significantly, this will also have an impact on the selling price in the supermarket.
However, these effects cannot necessarily be felt immediately, even if the wheat price is already rising enormously. The VGMS explains: Many delivery contracts run for months at fixed prices, which means a certain stability for consumer prices.
Swell:VGMS, boerse-online.de, finanzen.net