By Chrysostomos Tsoufis
The sneezing of the mouse scared the elephant. Somehow analysts likened her reaction of food stock markets in India ‘s decision to ban wheat exports.
The price of wheat rose to $ 12.4 / bushel one breath from the record of 14 years of $ 12.5.
India is not even one of the most important wheat exporters in the world with a share of only 3% in value in 2021. Under normal circumstances the consequences of its decision would be almost negligible, but now the conditions are not normal. Why millions of tonnes of wheat from Ukraine and Russia are missing from the market which can not be exported either due to blocked ports or due to sanctions. As if all this were not enough, production in the US, the second largest exporter after Russia, due to adverse weather conditions is expected to be 3% lower.
Of course, the problems in the market had started long before the Russian-Ukrainian war, when in the summer of 2021 the economies began to “wake up” from quarantine, however supply was not able to meet demand.
Somehow in a year the price of wheat has risen 78%. By February 24, when the war began, it had already risen by almost 33%. Wheat is not the only crop that has grown. The data show 50% increase in palm oil, 33% in cheese and 32% in milk, 53% in coffee, 77% in oats, 29% in rice, 15.5% in sugar and 23% in corn.
But the most worrying element is the trend for the future. The models that analysts are running show a further appreciation of 20% in maize, 7% in wheat and rice and 15% in palm oil for a period of 12 months, which is expected to pass on the supermarket shelf.
However, price increases are expected in products other than food and not only because of the increased energy costs. Due to quarantine in many cities in China, Thousands of ships remain stranded in Chinese ports without being able to transport their products. However, every day they do not travel, they are charged with fare and additional costs, which will again be borne by the consumer.
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