The Russian invasion of Ukraine may have seemed like an isolated incident when it first broke out, but now almost a month later and with no end in sight to hostilities in the Eastern European country, issues stemming from the invasion are starting to be felt worldwide. And unfortunately, the world will likely continue to see the ripple effects of the invasion into the coming months. Financially, the ripple effects will make a hit on everyone’s wallet and possibly be life altering for many regions of the world.
Ukraine is one of, if not the largest raw grain producers in the entire world. And Russia is close behind it. The two countries combine to export over a quarter of the world’s wheat supply and over half of its sunflower products. Ukraine is also known to export a considerable amount of corn worldwide. With war between the countries, production and exports will be affected. Time to try and hit it big in the online casinos. It might be the only way to afford some types of food in the coming months.
War Affecting Production
Even though the countries have not entered into the main growing season for production, the effects of war, especially on Ukraine, are already being felt. Preparations for the growing season have not been undertaken as normal because many of the workers who usually work in the fields are currently displaced or taking up arms to fight the Russian invasion. This is already spelling disaster for the global food outlook heading into the spring and summer production seasons.
Russia is also being negatively affected by its invasion of Ukraine as most of the world’s major countries have hit Russia with economic and financial sanctions in an attempt to get the Russian government to stop the invasion. So far, those sanctions have done little to stop the Russian war machine from continuing its operations. But currently, Russia is floundering, not being able to trade with many countries.
With its inability to export goods, especially grains, there are already shortages of grain products being shipped out. Ports in Ukraine are completely shut down. This means nothing in or out of Ukraine, which has one of the biggest ports in Eastern Europe for goods.
Ukraine Breadbasket
For countries like Lebanon, Yemen, Syria, and Tunisia, they rely on the grain production of Ukraine to trade with to feed the people of their country. With the crisis in Ukraine, the roles have reversed. War torn Ukraine is now asking for aid from around the world. But also, with other countries not being able to rely on Ukraine, they must now look elsewhere for their grain supplies.
This will burden the world economy and food supply because now a much smaller amount of grain will have to be shared amongst the rest of the world. This reality check is hard to swallow when you think of a quarter of the world’s grain disappearing from the market for a currently unknown period of time.
Rising Food Prices
With future shortages of grain and other agricultural products being added to the list of an already strained economy worldwide due to COVID-19, things are looking to get worse before they get better. With high demand, more supply chain shortages will see already high prices continue to soar. And food production will not be spared when it comes to rising prices.
Worldwide, many will suffer due to the shortages and high prices. Inflation has already caused food prices to rise notably, even in the most economically well off countries. The rippling effect that the Ukraine invasion will have is yet to fully come into the picture, but it is shaping up to be more like a tsunami wave than it is calm manageable waves. How the world reacts and staves off another crisis in a short period of time will test everyone globally.
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Hopefully, the crisis in Ukraine is resolved quickly peacefully, and the ramifications of the event can be reversed. But everyone should be prepared and braced for higher food prices around the world for the foreseeable future. Until Ukraine can get back on its feet and producing agricultural products, the food industry will be reeling.