Daily Times

Greece’s First Deputy Foreign Minister Miltiadis Varvitsiotis has said that the country and the European Union (EU) as a whole should brace for a grain deficit as the result of the conflict in Ukraine and anti-Russia sanctions.

The shortage could mean, “Firstly, a significant increase in prices and, secondly, it could mean that we will see unrest in the wider region and especially in North Africa and the Middle East,” he said at a meeting in Brussels on Tuesday.

Russia’s military operation in Ukraine has affected grain supplies from the two countries, which are major global exporters. The crisis has sent wheat prices soaring in recent weeks to the highest point since 2008. Global food prices have also hit historic highs amid supply concerns.

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, said Monika Tothova, an economist with the Food and Agriculture Organisation 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. 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 20pc of the global market, while Ukrainian grain currently accounts for around 10pc. Nearly 10pc of global grain output is produced in Russia, while Ukrainian production amounts to 3pc of the world’s output.