Global agricultural prices surge by 30% since start of war in Ukraine amidst drought conditions

In a new report on the short-term outlook for the sector, the European Commission highlights that the Russian invasion of Ukraine and the drought in parts of the community are having negative impacts on agricultural markets and “represent a major threat to global food security”.

“Ukrainian agriculture is directly affected throughout the entire supply chain, from production to trade, which maintains pressure on the world supply of grains and oilseeds,” the EC said. In the EU, meanwhile, cereal production is affected by drought “in several regions”.

However, existing reserves “will help meet domestic consumption needs and part of export demand, which is expected to remain high in the face of pressures on global markets.”

The Commission pointed out that cereal prices remain “very high and volatile” due to uncertainty about the global level of supply caused by the war in Ukraine, “which further aggravated the high prices of energy and fertilisers and the demand of animal feed after COVID-19”. The move to allow cultivation on fallow land will result in EU sunflower seed production reaching a record 11.1 million tons this season. The report concludes by stressing that “the availability of food in the EU is not at risk”.