Beer and bread prices on the rise amid wheat shortages

The cost of wheat has soared by nearly 50 per cent over the past two weeks, acting as a stark reminder that it is not only oil and gas prices which are surging to historic peaks because of the Russia-Ukraine conflict.

Wheat prices are rising “to a place that they have never ever been to before,” warned Minette Batters, president of the National Farmers’ Union.

This in turn could see the price of staple foods like bread, potatoes and pasta increase by anywhere from 20 to 50 per cent over the coming months. 

Ukraine and Russia are often dubbed “the breadbasket of Europe” and it’s not hard to see why. Together the two countries account for roughly one-third of global grain exports. 

They also constitute 52% of the world’s sunflower oil export market, and a third of global barley supplies. Rising prices for barley have already prompted Heineken to warn beer drinkers that it will have to raise prices. 

What are the reasons this conflict will prevent these ingredients from reaching those abroad? Russian sanctions is one factor. Additionally, Ukraine’s military has suspended all commercial shipping at its ports in the aftermath of the Russian invasion and some farmers have already abandoned their fields to take up arms. The scarcity of farmers still tending to their fields – or being able to plant seeds in the spring – sows doubt over whether Ukrainian wheat will get harvested once it’s ready in June.

Many of the countries which depend most heavily on grains from the Black Sea region are already some of the world’s most vulnerable. 

Lebanon, a nation in the grip of a recession with inflation at a record high, imports roughly half of its wheat from Ukraine and Russia. In Egypt, Turkey, Bangladesh and Iran the figure is closer to 60%.

A third of wheat in Yemen comes from Russia and Ukraine – and in this war-torn country, bread constitutes over a half of the calorie intake for the average household. “8 million children in Yemen are already in the brink of famine,” according to Save the Children’s Rama Hansraj, and bread is “the main ingredient keeping them alive.”

When it comes to rising food prices, much like the gas crisis, Russia’s invasion has merely intensified pre-existing woes. 

Food prices have been on the rise throughout much of the world, and the global food supply chain was already in a precarious position. According to David Beasley, head of the World Food Programme, the number of people at risk of starvation worldwide had risen from 80 million to 276 million in four years prior to Russia’s invasion, due to what he describes as a “perfect storm” of conflict, climate change and coronavirus.

And, to make matters worse, even crops grown outside of Russia and Ukraine could be impacted by war-induced fertiliser shortages.

Without fertiliser, the yield of many crops will drop by roughly 50%. Not only is Russia the lead producer of fertiliser, but also huge amounts of natural gas are required to produce ammonia – the key ingredient in nitrogen fertiliser.