Saabira Chaudhuri reported in today’s Wall Street Journal that “Russia’s invasion of Ukraine has sparked a global shortage of sunflower oil who in turn high prices other edible oils recordshitting food manufacturers and consumers already struggling with inflation.
“Ukraine is a major producer of sunflower oil, representing more than 47% global exports, according to research firm Mintec. But shipments of sunflower oil – and seeds used elsewhere by crushers – have on the ground at a standstill in the middle of the war, disrupt supplies widely used in cooking and as an ingredient in everyday products such as margarine, mayonnaise and bread.
The shortage of Ukrainian sunflower oil has triggered a domino effect that underscores how interconnected global commodity markets drive up the price of other oils produced elsewhere, including those not generally considered substitutes for sunflower oil.
Today’s article notes that “most of Ukraine’s sunflower oil exports, like its large grain shipments, are destined for developing countries, where rising food prices will have a disproportionate impact on the poorest consumers.”
Sara Menker and As Ukrainian farms have turned into battlefields, uncertainty around the country agricultural exportsas well as Russia, created a global food emergency driving up the prices of wheat, corn, soybeans, fertilizers and sunflower oil.
“Commodity prices like wheat and corn are global, but their shocks are inequitable. Wealthier countries and populations can absorb large price increases. Meanwhile, people from poor countries, like Sudan and Afghanistan, find it much more expensive to eat. In Sudan, rising wheat prices caused the price of bread roughly doubled. Because Ukraine and Russia animal feed and fertilizers exported Before the war, the cost and difficulty of producing food will increase in the months and years to come.”
The war in Ukraine has created a huge global grain and sunflower seed supply deficit. High energy prices have pushed up food production and input costs, limiting the ability of other countries to boost production and fill the gap. This could further increase global food and feed prices by up to 22%.
—Maximo Torero (@MaximoTorero) April 5, 2022
Michael M. Phillips, Wall Street Journal writer reported earlier this week that, “A quarter of Africa’s population faces a food security crisis driven by severe drought, raging wars and rising global food prices caused by Russia’s invasion of Ukraine, the International Committee of the Red Cross warned on Tuesday.
Market signals trigger reactions to changing supply conditions.
Bloomberg writers Maria Cervantes and James Attwood reported this week that, “Since Russia invaded Ukraine, farmers in one small town after another on The plains of the Argentinian pampas been recalibration plans to take into account soaring prices of crops and inputs such as fertilizers. Six weeks later, a tendency is emerging: the South American nation is ready for a sunflower boom.
“Russia and Ukraine normally account for close to 80% solar oil exports. With expeditions plunging amid the upheavals of war, a door has opened for Argentinalargest supplier of soybean oil, revive its sunflower industry.
“The planting in 2022-2023 could extend up to 2 million hectares (4.9 million acres), Guillermo Pozzi Jauregui, head of the Argentine Sunflower Association, said in an interview. It would be a fifth more than the previous season and the most for 14 yearsaccording to data from the Buenos Aires Grain Exchange.
And Reuters editors Michael Hogan and Gus Trompiz reported yesterday that “Russia’s wheat exports pick up after an initial slowdown following the country’s invasion of Ukraine, with lower prices than many of its competitors, helping to secure sales.”
“‘Russian wheat looks cheap and some importers face huge cost increases if they switch to alternatives like the EU, US, Canada, Argentina and Australia, who are all more expensive than Russian wheat,’ [one European trader said.]”
The availability and rising cost of production inputs continues to be an issue facing producers.
Bloomberg’s Jonathan Gilbert reported yesterday that “Argentina is struggling with diesel fuel shortages that powers tractors and trucks just as soybean and corn harvests are ramping up at the central crop exporter.
“Farmers ready for field work and truckers driving crops to port are signaling rationing and soaring prices across the pampas growth belt, with protests this week along major trucking routes. Argentina is the world’s largest exporter of soybean meal and oil and the third largest supplier of corn.
“If the soybean harvest is delayed, the plants would begin to lose beans and lose yield, according to Esteban Copati, head of crop estimates at the Buenos Aires Grain Exchange. High diesel prices, he said, also risk compression of profit margins which are closely watched by traders as they impact farmers’ planting and selling strategies.
And Reuters editors Pj Huffstutter, Tom Polansek and Bianca Flowers reported yesterday that “some livestock and dairy farmers, including those who previously paid to have waste removed from their animals, have found a fertile side business selling it to grain growers. Equipment companies that make manure spreading equipment known as “honey carts” also benefit.
“Not only are more US farmers hunt manure for this spring planting season, some feeders who sell waste are sell until the end of the year, according to industry consultant Allen Kampschnieder.
“Manure is a hot commodity,” said Kampschnieder, who works for Nebraska-based Nutrient Advisors. “We have waiting lists.”
The Reuters article noted that “prices for good quality solid manure in Nebraska alone have reached $11 to $14 per tonne, from a typical price of $5 to $8 per tonne, said consultant Kampschnieder.
