These Everyday Food Item Prices Are Set To Rise Because of Ukraine War

The raging war in Ukraine, long considered the "breadbasket" of Europe, is already causing disruptions and undermining food security beyond Europe's borders.

"The Black Sea basin is one of the world's most important areas for grain and agricultural production, and the food security impact of the conflict will likely be felt beyond Ukraine's border, especially on the poorest of the poor," said the United Nation's World Food Programme executive director David Beasley in a statement as the war broke out.

Ukraine has some of the most fertile land on the planet, and it is thanks to this rich soil that the country is among the top four exporters of grains in the world. On top of that, the country is also the biggest producer and exporter of sunflower oil on the planet.

The interruption of the normal flow of these products from Ukraine "will increase prices and add further fuel to food inflation at a time when its affordability is a concern across the globe," explained Beasley, citing the pandemic.

According to the U.N. food agency, food and feed prices could rise up to 20 percent around the world. Analysts fear that the global price of wheat could even double.

What Does the World Rely on Ukraine For?

Keeping faithful to its nickname of "granary of Europe," Ukraine is a massive producer of grains—mainly corn and wheat.

The U.S. International Trade Administration estimates that grain production volumes have been steadily increasing in Ukraine since 2013, with this growth being halted in 2020 because of the pandemic and unfavorable weather conditions.

Even then, the gross grain harvest amounted to 65.4 million tons—"still three times more than the needs of the domestic market," ITA said.

In 2020/21, Ukraine was the fourth largest exporter of grain in the world, according to the International Grains Council. Russia ranked third.

According to The Observatory of Economic Complexity (OEC) the majority of its corn exports in 2019, the latest data available on the website, went to Egypt, Spain, the Netherlands, China and Italy.

In the same year, the country was the biggest exporter of seed oils in the world, with $3.75 billion worth of seed oils sent to India, China, and Spain among others. In 2019, Ukraine also exported $3.11 billion of wheat abroad, mainly to Egypt, Indonesia, the Philippines, Turkey and Tunisia. Ukraine also ranks quite high as a producer of barley, rye and potatoes.

Now, the Ukrainian Grain Association told Reuters it estimates that $6 billion worth of wheat and corn exports are sitting idle in Ukraine's ports, unable to reach their destinations because of the war.

At the same time, new crops are unlikely to be sown by Ukrainian farmers, who likely fear for their safety, and new wheat is probably not going to be planted for the same reason. So, the situation is likely to worsen for as long as the war drags on.

Ukraine Crop Inflation War
Wheat is pictured as a farmer harvests a field on land near Zhovtneve village, in the region of Chernigov, some 220km north of Kiev on August 11, 2009. GENYA SAVILOV/AFP via Getty Images

What About Russia?

Russia is the world's largest exporter of wheat, producing 80 million metric tons of the grain per year and exporting about 30 million, according to the U.S. Department of Agriculture. Combined, Russia and Ukraine make up a significant global percentage of wheat, corn, barley, sunflower oil, seeds and meals exports.

On March 14, Russia announced it temporarily banned grain exports to ex-Soviet countries. While sanctions on Russia could definitely have a negative impact on the country's grain production too, the role of Russia as a massive fertilizer producer—with 15 percent of the world's entire supply—is even more relevant and could impact crop yields across the world.

The country is also a massive supplier of metals used for everything from car components to aluminum cans. That means that the price of certain food products could rise not only because of direct shortages, but also for an increase in the cost of tinned cans.

What Will Be the Impact of the War on the World's Food Supplies?

While the most vulnerable countries to food shortages and price rises are the ones that most rely on Ukraine imports, the entire world is expected to be affected by the war.

On Thursday, the United Nations International Fund for Agricultural Development (IFAD) said the war is already inflating food prices amid crop shortages in parts of Central Asia, the Middle East and North Africa.

Since the beginning of the invasion, wheat prices have surged by more than 50 percent, reaching a record of $13.40 a bushel, according to the Chicago Board of Trade, the international benchmark. The price of corn traded in Chicago also jumped by 10 percent.

In the U.S., farmers have been forced to cut back on soil nutrients, threatening the size of the next harvests. Prices for groceries in the U.S. grew by 8.6 percent in February compared to the previous year, the highest increase in the country in 40 years. Kellogg's and General Mills in the U.S. have announced they will likely raise prices to face inflation.

It is not only the price of bread, pasta and all kinds of flour-based snacks that are expected to increase, but also the price of meat. Almost 60 percent of Ukraine's exported maize is used as livestock feed, which would suggest the meat and dairy industries also stand to take a hit from the war in Ukraine.

The full extent of how the conflict will exacerbate the cost of living crisis across the EU and the U.S. is still to be fully understood as the situation unfolds.