War makes food even more expensive (nd-aktuell.de)

Image from more peaceful times: Harvested wheat near the village of Lukasheve in the Zaporizhia region of south-western Ukraine

Foto: imago images/Ukrinform/Dmytro Smolienko

The war in Ukraine and the sanctions against Russia and Belarus are having a massive impact on food production. The industry service »Agrar heute« warns: »The effects on the global supply of wheat, corn and barley are considerable given the weight of both countries on these markets.« Because more than a third of the world harvest is grown on the fertile black earth soils of Ukraine and Russia driven in on wheat. Should the Ukraine fail as an exporter this year, supply bottlenecks threaten worldwide.

According to the German Farmers’ Association (DBV), Germany would then be able to grow spring wheat. “However, its yield is significantly lower than that of winter wheat and it also places high demands on the location. In this respect, an expansion in cultivation and yield is only possible to a limited extent,” admits Johann Meierhöfer from the DBV.

The question of location is even more important for sunflowers, as they have high temperature requirements. But here an expansion of the previous extent of cultivation is possible. »With both types of fruit, however, there can be problems with the availability of seed, because this is adapted to average demand. Another problem with sunflowers could be the processing capacity,” explains Meierhöfer.

In any case, the prices for wheat, for example, will rise massively. A ton of wheat already costs almost 360 euros on the stock exchanges, a third more than a month ago. Germany produces more wheat than it consumes. But when prices rise worldwide, they also rise in Germany. The fact is: Preparations for sowing should be underway in Ukraine at the moment, but the war makes this almost impossible. For example, diesel, which is so important for tractors, is strictly rationed in the Ukraine and reserved for the army.

But the German food industry is not only worried about the rising wheat prices. According to the Federal Association of the German Food Industry (BVE), skyrocketing energy prices are a much bigger problem. Since 2021, there has been a marked price dynamic for electricity, gas, heating oil and other fossil fuels, which drove up energy prices by 25 percent in the past year alone. “The continued increase in energy prices is having a dramatic impact on the earnings situation in our industry,” says Peter Feller, deputy general manager of the BVE. The war in Ukraine is making oil and gas even more expensive and likely to become scarcer in the near future.

The farmers are also suffering from the high energy prices. To make matters worse, fertilizer prices are skyrocketing, partly because Russia is one of the largest exporters of fertilizers. Even before the invasion of the Ukraine, prices exploded because Russia surprisingly decided on a two-month export ban on ammonium nitrate at the beginning of February. Alongside urea, salt is the most important fertilizer in the world. How and whether the shortfalls can be compensated for in the long term is still open.

The DBV makes it clear that the high fertilizer prices are of course a burden for arable farms. »But as long as the producer prices remain at a high level, it will balance out. At the same time, however, it must be emphasized that precisely for this reason the farmers are not benefiting from the situation,” says Meierhöfer.

Potash fertilizer has also become significantly more expensive. The sanctions against Belarus are noticeable here. The state-owned company Belruskali is one of the largest potash exporters in the world and produces 15 percent of the world’s potash fertilizer needs. The crisis is worsening because China has imposed a temporary export ban on fertilizers, which is to apply until May of this year. Since natural gas is essential for the production of nitrogenous fertilizer, the rising prices will have an additional impact on farmers. Not to mention the diesel prices, which have increased by more than 50 percent within a year. Farmers must therefore try to pass on the increased production costs.

Therefore, food prices will continue to rise sharply. The main victims are those who have little: Hartz IV recipients and low-income earners. As early as 2020, the Paritätische Gesamtverband found in a study that a couple with two children in relation to Hartz IV were missing 123 euros a month for food in order to be able to eat healthily. For a man living alone, the difference was 45 euros even then.

In the corona crisis, however, consumer prices for food increased by almost 10 percent. “I have to spend about 30 euros more per month on food than I did a year ago,” a Hartz IV recipient told nd. However, the standard rates, which were already too tight, only rose by 3 euros this year.

In Ukraine itself, according to the United Nations World Food Program (WFP), the supply situation for the civilian population is now dramatically worsening. »We are receiving reports from Kyiv and Kharkiv that food is running out and drinking water is becoming scarce«, said the director of the WFP in Germany, Martin Frick, at the weekend. The priority of the UN organization is now to establish supply routes to Kyiv and the epicenters of the conflict before the fighting escalates further. WFP is expanding its presence across the region, but it is a race against time.

An international team is already in Ukraine and neighboring countries to coordinate aid. Trucks with 400 tons of food are on their way from Turkey. “Fighting and refugee movements throughout the country make the situation confusing for the helpers, too,” says Frick.

According to WFP estimates, the war in Ukraine also threatens to worsen hunger crises worldwide. In a year when the world is already facing “unprecedented levels of hunger, it is particularly tragic that hunger is reaching Europe’s breadbasket,” said WFP Executive Director David Beasley. With agencies

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