War in Ukraine: The EU weathers the blow of the food crisis but suffers from rising prices | International

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The European Union is its own barn. He buys wheat and corn from the Ukraine, yes. But when you look at the total grain trade figures of the Twenty-seven with the rest of the world, the balance is overwhelmingly positive. The forecasts of the European Commission suggest that exports will exceed imports by 30 million tons in the 2021-2022 season, a figure that will reach 40 million in the following one. The Russian invasion of its southwestern neighbor has aggravated the global food crisis, because the invaded country is indeed the world’s largest grain exporter. But in the EU the main consequence will not be food shortages so much as a significant increase in prices.

Since the war began, the price of cereals has skyrocketed in practically all the markets that serve as a reference in the EU. Before the Russian aggression began, prices were already increasing, but since then, the increase has become a big jump. In Rotterdam, in January and February, the ton of wheat was paid at about 270 euros; in mid-April, the price was 404 euros; in Valladolid it was around 300 euros, later it reached 362; and in Hamburg (Germany) and Rouen (France) the increase has been from 300 euros to 392.

With all these data, the first conclusion in the Union as a whole seems clear. The main headache will be the increase in prices, another cause that will be added to gas and fuels, with runaway inflation in the last year reaching 7.5% in the euro zone. There is another: it is the moment in which the defenders of the Common Agrarian Policy (PAC) stick out their chests. It is easy to find attacks on the PAC for being the main item of expenditure of the community club, almost 60,000 million in 2019, to support farmers in an activity with profitability problems on many occasions. Now, on the other hand, Europe has a cushion that allows it to overcome the food crisis, although not without problems (Ukraine represents 50% of all the sunflower oil that is exported in the world).

“Food availability is not currently at stake in the EU, as the continent is largely self-sufficient for many agricultural products. However, our agricultural sector is a net importer of some products, for example, proteins for animal feed. This vulnerability, together with the high costs of inputs such as fertilizers and energy from fossil sources, is causing production problems for farmers and ranchers and risks driving up food prices”, summarized the vice president of the Commission, Valdis Dombrovskis, and the Commissioner for Agriculture, Janusz Wojciechowski, presenting measures to support farmers with the war in Ukraine already underway.

This plan also included measures to cushion the impact of the conflict on the world food crisis. And, as a continuation of this objective, on Thursday the European Commission reported that it is raising the urgency of removing the grain that is in Ukraine. This country sells 75% of what it produces outside its borders, but now it is stuck due to the Russian blockade of the Black Sea ports.

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The alternatives that are being considered to facilitate the exit are the trains and the fluvial canals, although neither is easy, especially the first. Why? Due to a well-known problem in Spain, the Ukrainian track gauge is greater than that of the rest of the continent, and this means that the cargo has to change wagons or that ones that can adapt to both gauges are needed. “Thousands of wagons are waiting at the borders with the Member States and even more grain is ready in the silos for export,” the Commission document underlines.

The other option to bypass the blockade, transportation through the canals, is, according to the plan presented by Dombrovskis and Wojciechowski, “very insufficient and not adapted to operate with such substantial cargo volumes”. The proposed solutions range from streamlining bureaucratic procedures to a call to “market players in the EU” to make equipment, vehicles, rolling stock, ships and barges available for this task, through establishing coordination platforms.

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