Grain prices unlikely to return to pre-war levels despite Russia and Ukraine deal, says Agbiz

WHILE the Russia-Ukraine “grain deal” signed last week is a positive step in addressing global food insecurity, however, the grain prices are unlikely to return to pre-war levels.

A range of factors were already driving agricultural prices up over the past two years, according to Agricultural Business Chamber (Agbiz) chief economist Wandile Sihlobo.

As an example, the drought in South America, East Africa and Indonesia as well as rising demand for grains in China had weighed on global grains supplies these past few seasons and pushed prices up even before the war.

“The possible price decline and increase in supply due to the Russia-Ukraine “grain deal” would have likely benefited all importing countries and consumers in the medium term. This assumes that shipping lines will start taking orders and moving the grain,” Sihlobo said.

Russia had agreed not to attack grain vessels in the Black Sea region, which could restore the grain trade. However, this promise did not last long, as the world woke up the following day to the news of a series of Russian missile strikes that hit the critical Ukrainian port of Odesa.

Source: IOL