The war in Ukraine sent the price of wheat soaring on Tuesday (1), reaching the highest value in 14 years and putting further pressure on the price of bread and pasta.
The price of wheat on the Chicago Stock Exchange rose 7.54%, with the bushel (27.2 kilograms) trading at US$ 9.98 in contracts for May, the highest level since 2008.
Ukraine and Russia export around 30% of the world’s wheat. Although Brazil buys predominantly from Argentina (85% of the total), any impact on the global market puts pressure on prices for all buyers.
Brazil is one of the largest global wheat importers, having to source 60% of what it consumes from other countries, according to Abitrigo (Brazilian Association of Wheat Industries).
The forecast is that, this year, shipments to Brazil will reach 6.5 million tons.
For the market, Tuesday’s rally, on the sixth day of Russia’s war, is a sign of fears of a long supply stoppage.
On the first day of the war, wheat had already risen 5.7% compared to the day before, quoted at US$ 9.26 per bushel. Since then, it accumulates daily highs, until reaching the level of this Tuesday.
Abitrigo projects that prices will continue to rise in the next four or five months, in a scenario of increase already registered before the beginning of the conflicts in Eastern Europe.
According to Rubens Barbosa, president of the association, the evolution of prices will depend on the extent of the war.
Russia is the world’s leading exporter, while Ukraine ranks fourth.
In addition to the increase in wheat itself, other factors may cause the rise in quotations in reais, such as the dollar and uncertainty in relation to fertilizers, on which Brazil is highly dependent on imports.
Russia is among the biggest producers of potassium chloride and other nitrogenous fertilizer products.
The bakery sector, in turn, projects that the increases that have already occurred in recent months will continue, but still as a result of the exchange rate fluctuation, not the war.
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