The war in Ukraine is seeing a new crisis emerge with wheat prices skyrocketing globally.
In just a week wheat prices have reached a 14 year high, up nearly 40%. Around 30% of the global wheat supply comes from the Black Sea region, Ukraine and Russia, known as the “breadbasket” of the world.
Now, the war there is affecting nearby nations.
"Our reserves will drop and instead of supporting our needs for four years ahead, it will only be available for three or two months," an Egyptian farmer says.
"The war between Russia and Ukraine caused peoples demand for wheat to increase so much that some traders raised the prices," a baker in Lebanon said.
Ukrainian farmers have had to flee their land and the ports are shut for exports. There are fears now that food shortages and price hikes will drive more people into poverty.
“We are already dealing with multiple wars, conflicts, climate crises, economic effects of Covid, in certain places just cold, and then compounding costs because costs of grain and oil are already going up. So it came at the worst time,” says the World Food Programme Chief Economist, Arif Husain.
The harvest this year globally has been challenging and hasn’t produced the highest quality wheat or much of it, according to our own farmers here in NZ who say we’ve had a particularly wet harvest season, affecting our own supply.
“We will only have around 25% of the wheat we normally do in the South Island and the grain in the North Island is largely imported,” says Edward Luisetti from the New Zealand Grain and Seed Association.
New Zealand doesn’t take wheat from Ukraine or Russia but our main importer, Australia, also had a weather-hit harvest, and increasing demand on their supply may have a knock-on effect.
“Now that the Black Sea is effectively closed for the exportation of wheat, other countries will be competing for the wheat in Australia and this will drive prices up,” says Luisetti.
Some farmers believe New Zealand can be self-sustainable and this is the time to put more resources into the industry to make sure the staple food is in constant supply.
“Being more reliant on domestic wheat is certainly something we think is an opportunity for the industry, we can lift production, we know we can grow quality product as anywhere in the world,” says Brian Leadley a wheat farmer and the Vice-Chairperson for the Federated Farmers Arable Industry Group.
But they say the clock is ticking, with the need to quickly secure a better price from millers ahead of the upcoming planting season.
“Decisions are being made and locked in around planting going forward and planting will begin in the next three to four weeks for some growers. So the opportunity is there now,” says Leadley.
“We are moving to the stage where the concern is will we have sufficient wheat or at least good quality wheat for our shelves? We can help rectify that going forward but it needs to be at a sustainable level for arable farmers, so that’s crucial to us and to get those signals really quick is crucial."
One food supplier, George Weston Foods which contains Tip Top, Burgens, and Ploughmans Bakery brands, told 1News they’re closely monitoring the situation.
Local growers now urgently seeking certainty around what returns they can expect before putting the crops in the ground.
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