LONDON — The Ukraine-Russia conflict will impact food sectors such as bakery and cereals “severely” in the coming months, according to London-based GlobalData, a data and analytics company.
“Ukraine is a producer of wheat, maize, barley, rye, potatoes and buckwheat, and together with Russia, it supplies a sizeable chunk of the global wheat market,” said Amira Freyer-Elgendy, food and drink associate analyst for GlobalData. “China, Italy and Spain, which are key markets for the global bakery and cereal, are some of the country’s top export destinations, and so the global landscape of the segment may dramatically shift.”
The rising prices will impact regions in the Middle East and North Africa the most, according to GlobalData. Australia potentially could supply the Middle East because of its bountiful harvest this year. The price hikes especially will affect the categories of morning goods, bread and rolls, and dough products like pizza bases and pastry shells.
Before the war, GlobalData forecast the global bakery and cereal sector to grow to $792.9 billion in 2025 from $625.8 billion in 2020, but the war will disrupt the situation.“The timing is unfortunate, coming off the back of the pandemic-fueled supply chain issues, poor wheat harvests in Russia and price hikes,” Ms. Freyer-Elgendy said. “With COVID-19 and the Russian conflict causing key issues for international shipments, a push for local products is expected. Many governments may look to invest in their local production to reduce reliance on the global market in the long term or enter new trade agreements with countries that produce alternative grains such as corn. However, this will do little to resolve the immediate shortages.”