Russia and Ukraine dominate the production and export of at least 13 commodities. At the same time, fertilizers are produced on a large scale in these countries. But the supply chain is breaking down due to the war.
Global Food Supply Chain: There is a situation like uncertainty regarding the economy of the world due to Russia and Ukraine war, another crisis is slowly increasing. As the dates of war in these countries continue to increase, there may be a situation of food crisis in many countries of the world. Its impact has started coming on some countries including neighboring Sri Lanka. In fact, both Russia and Ukraine dominate the production and export of at least 13 commodities. At the same time, fertilizers are produced on a large scale in these countries. But where the supply chain is breaking down due to the war, both the countries have also banned exports due to fear of shortage in their country. Fertilizer production has also been affected. At present, there is some concern for India in this crisis, so opportunities have also been created in some places.
Where is the concern for India?
Ajay Kedia, director of Kedia Commodity, says that between the war in Russia and Ukraine, the biggest concern for India is about edible oil. Talking about edible oil, India imports 80 percent to 85 percent of its requirement. But due to the breakdown of the supply chain, edible oil is becoming increasingly expensive. There is a boom in palm oil due to bio fuel, while the supply of sunflower oil from Ukraine has also been disrupted. This is a big concern for India. Palm oil is also used in blending. Another concern is that Ukraine and Russia have a sowing season for many commodities, including barley. But due to rust, sowing will be affected. This effect will also be seen on the sowing of the next crop. This will affect the supply chain in the global market.
Sufficient stock of these commodities including wheat
According to Kedia, there is no concern for India in commodities like wheat, rice, pulses, cotton and mustard. Talking about India, there is enough stock of wheat. In such a situation, the eyes of other countries can go towards India for wheat instead of Russia and Ukraine. Let us tell you that Russia and Ukraine are called wheat bowls. Record export of wheat can be seen in India this year. However, India will have to keep in mind that due to more exports, the stock at home should not be reduced. He says that there is not much concern in India for commodities like soybean, wheat, rice, mustard, spices or cotton. India is not much dependent on other countries regarding food grains.
Opportunity for India
Anuj Gupta, VP-Research, IIFL, says that there are opportunities in this for India too. Like India can increase the export of wheat. At the same time, Russia can also buy grain from India instead of crude. The cotton that Russia is currently buying from America can import it from India. Similarly, one can buy sugar from India instead of Brazil. India can also get this advantage in the case of corn. Although edible oil is a big concern.
Reason behind fear of food crisis
Fertilizer production is being affected in Russia and Ukraine. Fertilizers are exported on a large scale from these countries to other countries as well. If there is a shortage of fertilizers around the world, then agriculture will be affected. At the same time, there is a possibility of impact on the production and export of many commodities in both the countries. While Ukraine had recently banned exports due to the fear of shortage of some commodities in their own country. The economic ban on Russia will also affect the supply of the commodity.
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