Conflict in Ukraine Becoming a Major Concern for Global Ag Industries

The war between Russia and Ukraine is becoming a major concern for global agriculture industries.

The conflict is already looking like the most serious European war since World War II. The two countries involved are key players in the global ag trade, especially with wheat. Operations at all Ukraine’s ports have been suspended. If that continues, many buyers will shift their purchases to other markets, like with Canada, the U.S. and Australia. One analyst advises producers to take some risk off the table by making a market hedge sale.

“First, we have to acknowledge that we don’t know what the actual outcome’s going to be. So, you need to risk-off when you see a bounce in prices. One potential is that it will be more like business as usual in the Black Sea Region come the new-crop year. But if something happened where twenty-five percent of the exports couldn’t get through because of hostilities, that would entail a major shift in business, especially to North America.”

Analysts believe the conflict could send food prices higher. That would increase hunger from nations that already face food insecurity and rely on supplies from Russia and Ukraine.


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