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Wheat Ukraine/4. What are the consequences of the stop?

The futures are immediately splashed high, production is in danger: Italy looks for solutions, Europe trembles

The failure to extend the agreement on Ukrainian wheat is already having an effect. It is bad. The future of wheat with delivery in September immediately rose to 681.10 dollars per bushel (from 595 dollars of 30 may), the corn contract with delivery in December grows by 0.80% to 517.88 dollars per bushel from 477 dollars just sewi days ago, on july 12, sunflower oil is at 900 dollars per ton from 818 dollars a month or so ago (june 9).

In Italy the race against time has started to avoid a food catastrophe. "We are already working for alternative solutions", says Foreign minister Antonio Tajani. On 24 july, a summit on food security will be held in Rome, jointly with the United Nations.

Because with the lacked delay of the agreement, Coldiretti in a communiqué emphasizes, they will come to miss from the world-wide markets very 32,8 million tons of wheat, corn and oil of sunflower that have left from the Ukrainian ports of the Black Sea in the year of performance of the understanding. It is what emerges from the analysis Coldiretti on the basis of data of the Center Studies Divulga in reference to the impact of the stop to the UN pact between Ukraine, Turkey and Russia, on the transit of goods in the three ports on the Black Sea of Chornomorsk, Yuzhny and Odessa.

"A decision -underlines Coldiretti- destined to upset world markets due to the weight of cereal production in Ukraine. China (24%), Spain (18%), Turkey (10%) and Italy (6%) benefited from the agreement. An analysis shared by Oxfam according to which the rich countries have grabbed 80% of the grain and cereals left from Ukraine, while the poorer countries affected by the food crisis have gone just 3%.

The renewals of the agreement, recalls Coldiretti, were important to face the danger of famine in those 53 countries where, according to the UN, the population spends at least 60% of its income on food. Again: global food prices have fallen by 20% since last year’s agreement. "The non-renewal, this time, anyhow -underlines the organization- is also a danger for political stability just as social tensions and migratory flows increase, also towards Italy".

Europe, at this point, is shaking, because it really risks being left without grain. The stop to the agreement on Ukrainian wheat could be a real storm, it is not known how perfect, on the prices of raw materials of true subsistence. To the "niet" of Russia, then, they join a series of other factors that put in danger production and consumption of these fundamental commodities. 

The European production of cereals, infarcts, has collapsed: not only in Spain, Portugal or Italy (up to -60% compared to 2022), but throughout the EU, and this has happened due to bad weather conditions throughout Europe. The current one is, perhaps, the worst harvest since 2007 and 10% below the average of the last 5 years. Not only that: the worrying numbers of crops will be accompanied by a serious quality problem in many regions.

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EFA News - European Food Agency