October 7, 2022

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The director of Acridel explains that “food” prices are rising because they are not available in the short term

Michel Portier, director of Agritel, an analytics and consulting firm that specializes in agro-agro-industrial markets, assessed food prices in the wake of the war in Ukraine on Friday evening, March 4, in France. “Flame for short-term absence”.

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franceinfo: Why is France, which produces so many grains, so affected?

Michael Porter: France is the first wheat exporter in the European Union, but prices and markets are completely globalized. Beginning in Egypt, bulk buyers of wheat, of Russian or Ukrainian descent, must have arrived between March and June for closer distribution. However, these appearances cannot be imposed considering the context of the war. So they have an obligation to restore it in the international arena. There is no shortage of wheat in the world, but there is a logistics problem. Ukraine still has 6 million tons of wheat to export until July, Russia has 8 million tons, which are in the pits, but can not be carried! The boat traveling on the Black Sea is no more, so buyers are forced to look at other sources [pour le blé], Including France. Prices have been rising steadily due to unavailability in the short term.

Will this price increase last for long?

You have to ask Mr. Putin if this war will last long. It is very difficult to have medium and long term forecasts. The northern hemisphere of wheat and corn is guaranteed to remain very high until the next harvest. Wheat prices will remain high until at least July. Maize prices are certainly high until October, as the harvest is a little late. European corn, but especially American corn has a fundamental problem: we have European law prohibiting the import of GMOs, while the United States is the world’s leading producer.

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What are the consequences?

The first effect is a very sharp rise in the price of feed for breeders and livestock, and meat prices are going down. As for consumers, I would say the impact on stores should be relatively moderate. Even if the price of wheat goes up, it will still be less than 10% of the price of a baguette. As far as livestock is concerned, the price of chicken and pork is very low. I’m not too worried. Where, most obviously, there will be an impact on consumers, be it on oils. Ukraine alone exports 50% of the global sunflower oil market. If we take the production of sunflower seeds in Ukraine and Russia, we get 80% of world production. So, for once, we will definitely go back to other oils.