Ukraine is the world’s sixth-largest exporter of wheat. In 2021, it exported 20 million tonnes, which was 10% of global exports. India exported around 7 million tonnes during the same period. But the war has changed everything. Thanks to Russia’s invasion, Ukraine’s wheat has almost disappeared from global markets. Moreover, another 30% of the crop might remain unharvested during the 2022-23 cropping season. One estimate says that Ukraine’s grain output, which includes wheat, corn and barley, might be reduced to half. That will not only reduce the supply in global markets, but also threaten the food security situation within Ukraine itself.
Not surprisingly, the international price of wheat is up by 80% compared to one year ago. Prices of other crops — including those used as animal feedstock — are also up. This is going to impact food inflation worldwide. This is especially so in developing countries such as India, where the bulk of the population spends 50% of their monthly household budget on food items. Brace yourself for high inflation.