Current tensions between Russia and Ukraine are expected to have a negative impact on global grain markets, as both countries are among the world’s largest grain producers.
However, it’s currently difficult to assess the scale of potential damage as food prices depend on a range of factors, according to Monika Tothova, an economist with the Food and Agriculture Organization of the United Nations (FAO).
“Taking into account the input of both nations into the world market of grain, the tensions between them inevitably influence the situation,” the economist said in an interview with TASS.
According to Tothova, the markets are also deeply dependent on such factors as volatility, climate conditions, costs of production materials, and many others.
“Thus, it is difficult to say exactly what impact we should expect, but certainly the current situation contributes to creating uncertainty in the markets,” Tothova said.
The economist added that much depends on how long the current situation could last and the way it could unwind.
“If further developments affect production, export logistics and other effects on grain markets will be very tangible,” she said.
The economist noted that Russian grain exports currently account for 20% of the global market, while Ukrainian grain currently accounts for around 10%. Nearly 10% of global grain output is produced in Russia, while Ukrainian production amounts to 3% of the world’s output.
A wide range of Western media outlets, along with multiple US officials, have been speculating about an imminent Russian invasion of Ukraine since November 2021. The White House and some US allies threatened the Kremlin with a new round of ‘crippling’ sanctions in the event of a military assault, citing the movement of Russian troops within the country’s vast western territory as evidence of such a plan. Moscow has consistently rejected the accusations, saying it has a right to carry out military maneuvers as it pleases within its own borders.