Soon after the Russian-Ukrainian war started, the economic repercussions were the first to show up. Both countries, together, produce the 29% of wheat, the 20% of corn and the 80% of sunflower seed oil worldwide, therefore, to no one’s surprise, prices related agricultural commodities went up.
The price of wheat was one of the most shocking developments, as it went up, during the first week of the war, over 40% in the Chicago’s stock exchange, reaching its highest price in fourteen years. As a direct consequence of this, wheat-based products’ prices increased as well. For example, the price of bread rose to 30% of its previous cost. Throughout April, the price for this grain increased 11,37%, reaching, therefore, a 44,27% in 2022.
Soy, also, attained a record shattering price, getting closer to the highest price reached back in 2012, when the price went up for US$ 618 for a ton. Despite this, it is relevant to acknowledge that the war was not the only direct cause of the increment of the cost of this bean. The droughts in Argentina, Brazil and Paraguay also had an impact, as they ruined the cultivated fields. On the other hand, Ukraine has the 16% of exportation worldwide, which increased up to 17% in February because of all the factor mentioned above.
Russia is one of the greatest producers of fertilizers, which could mean a new advantage to Argentina in this area, but, because of the lack of proper infrastructure, the country is also affected by the rise of prices. Brazil was also affected regarding this matter as he imports 85% of his fertilizers, most of which are bought from Russia, for the products he exports, such as soy, corn, or cotton. Therefore, for example, other countries, like the USA or Argentina, might become stronger competitors in the soy market. It may also be the reason why Brazil did not vote to remove Russia from the ONU.