Over the weekend, the Russian Foreign Ministry said it “can no longer guarantee the safety of civilian dry cargo ships participating in the Black Sea Initiative and will suspend its implementation from today for an indefinite period.” This followed a Ukrainian attack on its fleet in Sevastopol. Meat production and consumption are key in Asia, and for many Asian countries, grains such as wheat, corn and soybeans are needed for animal feed to produce beef, pork, poultry as well as fish, wrote authors Genevieve Donnellon- May and Paul Teng in a research note published by Singapore think tank RSIS. Major Black Sea exporters Russia and Ukraine account for about a third of global wheat exports, 15 percent of global corn exports and about 2.1 percent of global soybean exports, the pair said, adding that Asian countries were particularly hard hit. because many imports from the region. “For consumers in Asia, they are expected to pay even higher prices for food, including meat, because of the prolonged conflict alongside rising energy costs and inflation,” Donnellon-May told CNBC. “It will worsen in Asia Pacific with countries affected by higher levels [priced] Fertilizer, fuel and food prices, further exacerbating the Covid-related disruptions in supply chains and extreme weather events caused by climate change, which have affected agricultural production and food security.” “Consumers across Asia Pacific should expect to pay more for staple foods and also for meat.” 1 million metric tons less grain on the market could create a price increase of 0.5% Bfk92 | E+ | Getty Images Before Russia stopped participating, the Black Sea Grain initiative had unlocked 9 million metric tons of grain worth $3 billion, said Maximo Torero, chief economist at the United Nations’ Food and Agriculture Organization. “In practical terms, it means 1 million metric tons less grain on the market could create a price increase of 0.5%. So the short-term impact shouldn’t be too big,” Torero said on his “Squawk Box” CNBC. Asia” on Monday, adding that the longer the situation prevailed the higher prices would rise. Describing the situation in the Black Sea, Torero said there were 97 loaded ships waiting to depart, 15 incoming ships awaiting inspection and another 89 that had applied to join the initiative. The latest update of the FAO food price index showed that world food prices fell for the sixth consecutive month in September. Cereal prices also eased but bounced in September on fears of a continuation of the Black Sea Cereals Initiative beyond November. Donnellon-May said Asia-Pacific countries that could be hit hardest by the latest developments in the Black Sea include Indonesia, which recently booked cargoes of Ukrainian wheat, and Pakistan, where a government agency recently bought about 385,000 tonnes wheat, probably from Russia and Ukraine. Laos, Thailand, Malaysia, Sri Lanka and Bangladesh could also struggle. The UN and other international bodies urged Russia to withdraw its decision on the grain deal.
