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29th Jun 2022

EU states warn of looming food-price crisis

  • Ukraine is one of the world's largest suppliers of grain (Photo: Dominik Bartsch)
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Prices of cereals, fertilisers, and oilseed have shot up drastically in several European markets due to Russia's war on Ukraine, prompting some member states to seek EU aid.

The prices of maize, bread wheat, and common wheat are already between 56 percent and 71 percent higher than normal in Bulgaria, for instance, while sunflower oil is 81 percent more expensive, Sofia warned its peers in the EU Council ahead of a farm ministers meeting on 24 May.

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And the higher costs of feeding animals mean the costs of poultry, lamb, and eggs have shot up by some 30 to 60 percent in the EU's poorest country, it reported.

"The strong inflationary effects are a source of concern regarding the supply of food at affordable prices for the Bulgarian citizens and pose high risk for the economic results of our farmers," Sofia said, according to a French EU presidency memo dated 13 May and seen by EUobserver.

The Bulgarian figures show how food prices are galloping ahead of general eurozone inflation, which stood at 7.2 percent last month.

Romania, another poor EU country with a large farming sector, also spoke of a "price explosion" aggravated by low rainfall.

"We are receiving signals that some companies in the agricultural sector have stopped working and farmers have given up their businesses," Bucharest told EU officials.

The price of cereals and rapeseed also shot up by 70 percent to 99 percent compared to last April in Estonia.

And they jumped by 59 percent to 114 percent in Latvia.

"Production of livestock products needs to be ensured in a critical market environment," Riga warned.

"The market is experiencing an unprecedented increase in input prices, new sources of supply of some feed materials must be sought," it added.

"Energy-demanding sectors such as the animal [produce] sector are in a particularly difficult situation," amid a similar war-related spike in energy prices, the Czech Republic also said.

Czech pig meat and poultry reducers are below profitability and Prague "welcomes the possibility of exceptional financial aid from the EC [European Commission]," it added.

Ukraine is a major exporter of grain and sunflower oil, but Russia's blockade of Ukrainian ports has all-but stopped overseas sales except via land routes.

And while EU farmers and consumers can reach out for financial assistance, the situation is more acute for developing countries.

Some risked "malnutrition, mass hunger and famine, in a crisis that could last for years" UN secretary general António Guterres said at a UN food security summit in New York on Wednesday (18 May)

"Let's be clear: there is no effective solution to the food crisis without reintegrating Ukraine's food production. Russia must permit the safe and secure export of grain stored in Ukrainian ports," he said.

"The world is on fire. We have solutions. We need to act," the UN's World Food Programme head David Beasley also said.

But Andrei Rudenko, Russia's deputy foreign minister, indicated Thursday that Moscow would only open access to ports if the West rolled back sanctions, according to Russian news agency Interfax.

"You have to not only appeal to the Russian Federation but also look deeply at the whole complex of reasons that caused the current food crisis and, in the first instance, these are the sanctions that have been imposed against Russia by the US and the EU," he said.

And in the current situation, even some of the world's wealthiest nations have begun to raise the alarm.

"The Ukrainian crisis situation has disturbed agricultural commodities markets to an unprecedented level," Finland also said.

"The prices of main production inputs on farming have doubled or even tripled compared to their level one to two years back," it added

The EU Commission should stand ready to take "measures to balance the markets and strengthen the currently weak profitability of production and security of supply of the European Union", Helsinki said.

EU urged to grow more wheat to avert food crisis

European agriculture ministers have called for higher domestic farm output, amid food security worries, and a looming food crisis in Africa. Many African countries, eg Benin, Egypt, Sudan, Madagascar, and Burundi, are almost entirely, or exclusively, dependent on Ukrainian grain.

African Union chief raises alarm over food crisis at EU summit

Disruption in exports of grain and fertilisers as a consequence of the Ukraine war is triggering a "worrying" situation for the continent hosting 282 million undernourished people, African Union president Macky Sall told EU leaders at the summit.

Agenda

Economic worries and Hungary on the spot Next WEEK

Eurozone finance ministers will discuss the economic worries with the backdrop of Russia's invasion of Ukraine, agriculture ministers are set to talk food prices, and EU affairs ministers will put Hungary on the spot in the Article 7 procedure.

Column

One rubicon after another

We realise that we are living in one of those key moments in history, with events unfolding exactly the way Swiss art historian Jacob Burckhardt describes them: a sudden crisis, rushing everything into overdrive.

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