The Ukrainian government has warned that wheat growers might not be able to meet quotas for international contracts, sparking speculation over the prices of corn, a frequent substitute.
KIEV, UKRAINE – The shortage has been blamed on dry weather in Southern Ukraine during the months of June and July, right before the start of harvesting season. Officials were quick to explain that inventory from the previous year would help fill the gaps between the 4 million tons needed for export commitments, the 12.5 million tons consumed by the domestic market, and the 15 tons harvested in 2012. That failed to persuade speculators who feared the domino affect of a shortage of wheat, the basic ingredient in bread.
In 2008, when Ukraine – a top-ten exporter of wheat – fell short of its production demands, it triggered food riots in Africa, including Senegal and Egypt. Two years later, fearing another shortage, Ukraine – and neighboring Russia – restricted the export of wheat for three months. Russia, Ukraine and Kazakhstan account for a quarter of the global wheat supply used for bread, with much of it going to the Middle East and North Africa. In 2010, the shortage of Ukrainian wheat caused food prices to soar in Egtypt, stoking unrest in the streets that served as the precursor to the Arab Spring.
The recent announcement by the government in Kiev has left some worried about a repeated crisis in prices, and the possible effects of such a rise.