Ukraine, the “breadbasket of Europe”, has over 107M acres of agricultural land, with an area larger than Italy currently under cultivation. Prior to the invasion by the Russian Federation in February 2022, Ukraine was a major global producer and exporter of key commodities, with a top-10 global market share by volume in each of wheat (10%), barley (13%), corn (15%), and sunflower oil (50%).
Almost as soon as the first Russian troops crossed the border, the UN’s Food and Agriculture Organisation (FAO) expressed its concern about the war’s impact on global agricultural commodity prices – and the news soon hit the headlines of the global press.
For many, it was surprising to learn of Ukraine’s position as an agricultural global powerhouse. And the effect on key commodities of the war in Ukraine has been felt by Food and Beverage Buyers and producers, as well as consumers globally. Overall, the UN FAO expects food costs to have risen by between 8% and 22% in 2022 due to the direct effects of the war in Ukraine.
But what are the reasons for this?
The simplest of economic dynamics, the law of supply and demand, has caused those commodities in which Ukrainian exports were a major global factor to rise dramatically in price.
While some prices seem to have settled over the course of the last 6 months, particularly since the Russian blockade of key Ukrainian ports was lifted, there is still considerable volatility and unease in the market.
The restriction on Ukrainian exports has pushed up the prices of those commodities from other sources, too:
Outside of those crops and commodities directly impacted by the export disruption from Ukraine, there has been a broader knock-on effect to food and beverage ingredient prices caused by the rise in the cost of energy.
Rising energy prices have not only effected ingredients directly, but also had further negative impact on things like the cost of packaging and logistics, putting further pressure on supply chains.
If you’re worried about the rising cost of ingredients, we can help! Click the button below to book a call with one of the team and discover how Opply can save your business time and money!
And, check out some of our other news-related blog posts below!
Explore the nuances of using different sweeteners in your food and beverage products, from traditional sources like cane and beet to innovative alternatives. Sweet Decisions:
Looking for the best food ingredient suppliers in the UK? Opply has done the research for you. Read our guide to learn about ingredient suppliers, their specializations, and how to choose a reputable supplier for your business.
Looking for the best food ingredient suppliers in the UK? Opply has done the research for you. Read our guide to learn about ingredient suppliers, their specializations, and how to choose a reputable supplier for your business.
At Opply, we help brands source, manage and finance ingredient orders from a wide variety of ingredient suppliers. Learn about food and beverage ingredient suppliers here.
Navigate the world of specialty ingredient suppliers with ease! Opply’s comprehensive guide provides you with the knowledge and tools to confidently partner with specialty ingredient suppliers that elevate your offerings and meet consumer demand for innovative, delicious experiences.
Explore new and unique flavours by sourcing globally! Opply’s software automates ingredient ordering for Food & Beverage SMEs, making the process quick and easy. Learn more about globally sourced ingredients today!
Hello! If you want to join us, partner with us or just find out more, please don’t be shy.
Fill in a few details before connecting with us!
