The Russian invasion of Ukraine has caused the price of oil and gas to skyrocket, as a first collateral effect, and has also put pressure on food prices, especially cereals and vegetable oils, since Ukraine and Russia are the main producers.
According to the Food and Agriculture Organization of the United Nations (FAO), food is 21% more expensive at the end of February than a year ago. It is true that the upward trend in prices began due to the mismatch between supply and demand that occurred with the recovery after the pandemic, but the war in Europe has been the final touch. In Spain, the CPI closed in February at 7.4%, of which experts estimate that 1.5 points are the result of the outbreak of the war.
Vegetable oils, such as sunflower oil, which is already becoming scarce in Spain, were the foods that increased in price the most in February, by 8.5%, and accumulated an increase of 37% compared to the previous year, reaching a new record. Dairy products also rose, 6.4% worldwide compared to January, and cereals, which became 3% more expensive compared to January. The latter are expected to continue rising as the conflict continues and production collapses, which could also lead to serious food security problems in some importing countries.
Spain uses the Ukrainian supply of cereals and cattle feed, which it uses both, for its own livestock and to make feed that then export to the rest of Europe. A drop in production in Ukraine due to the war could lead to a shortage of certain products in Spain. It would lead the agricultural sector to have to look for alternatives in other countries, even though these will be at a higher price.
For the remainder of the season, the FAO expected Ukraine to export approximately 6 million tons of wheat and 16 million tons of maize, while Russia was expected to export approximately 8 million tons of wheat and 2.5 million tons of corn.