Arab News Japan
TOKYO: A report by the Nikkei newspaper in Japan has warned that food prices could soar even higher if Russia invades Ukraine, and this will have a major impact on countries in the Middle East.
Quoting an industry expert, the Nikkei reported: “Grain exports from Russia and Ukraine are so large that there is a potential for prices to spike if conflict arose.”
International wheat prices shot up more than 20% during the two months before Russian President Vladimir Putin announced the annexation of the Crimean Peninsula in March 2014 and a similar price rise is being seen on the futures market.
Russia is the world’s top exporter of wheat. The country accounts for 10% of global production and 20% of international exports.
Ukraine is the fifth-largest exporter, claiming a 10% share. The country also commands a share of corn exports exceeding 10%.
A Russia-Ukraine conflict will deal a significant blow to the Middle East and North Africa. The region is the world’s biggest consumer of wheat but relies on imports. Egypt is the leading importer of wheat, taking in 60% of its grain from Russia and nearly 30% from Ukraine.
High grain prices hold the potential of sparking unrest in the Middle East, Nikkei says. The food index is approaching the all-time high of 137.6 points seen in February 2011, when the Arab Spring uprising occurred to topple autocratic governments. The movement was sparked in part by public anger toward rising bread prices.