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Impact of Russia-Ukraine on Commodities

The war happening in eastern Europe is ongoing, as of today. The conflict has officially entered its second month and repercussions are affecting major food markets globally. Ukraine and Russia are both leading producers of a number of food ingredients used by food producers. They supply a wealth of components that play key roles in food and beverage products such as wheat, corn (maize), and sunflower oil. Read on to learn more about the impact of Russia-Ukraine on commodities.

Wheat

Together, Russia and Ukraine provide roughly 30% of the world’s wheat crop. The ongoing conflict in Ukraine will only lead to more shortages and price increases with the cease of exports from Ukrainian ports. Although the impact may take a little longer to be felt in markets producing their own wheat, such as in the U.S. and Canada, it is inevitable. The price for many types of wheat has already started to climb due to poor weather conditions in the U.S. As of March 7, 2022, wheat futures on the Chicago exchange were trading at their highest level since 2008, and global wheat prices continue to rise. It is very clear that prices for wheat around the globe will continue to spike. This will cause major impacts to a range of categories including bread, baked goods, cereal, pasta, and more.

Corn (maize)

Ukraine is also a major supplier of corn (maize). The country provides 16% of global corn (maize) exports, as well as 18% of the world’s barley. Major trade partners for Ukraine’s corn supply include Egypt, the Netherlands, and Spain. These countries will all feel the impact of an interrupted supply chain. According to Mintel GNPD, corn is used in roughly 25% of global food and drink launches, as well as in alcoholic beverages, sweeteners, starches, and corn oil derivatives that are integrated into other products. Prices in categories such as frozen and canned produce, breakfast cereals, and baked goods are going to be heavily impacted.

Source: USDA

Sunflower Oil

Ukraine is the world’s largest exporter of sunflower seed oil. Markets throughout the world are likely to be impacted by the absence of sunflower oil, one of the four major cooking oils utilized globally. Major EU markets including Germany, Belgium, and France are principal buyers of Ukrainian sunflower oil, as is the UK. Economists predict that the war, and the ensuing closure of Ukrainian ports, will lead to visible shortages at the retail level in as little as six weeks. And it is not just the cooking oil category that will feel the impact. Products across a range of categories, from cooking sauces to bakery goods and confectionery, include sunflower oil as an ingredient. According to Mintel GNPD, 20% of food and drink products launched in 2021 contained sunflower oil or other derivatives (eg lecithin and kernels). Furthermore, the war is also threatening Ukraine’s future sunflower harvests because farmers may struggle to even get seeds in the ground.

The anxiety that the conflict has caused, replaced the anxiety of COVID-19. Both companies and consumers are feeling price hikes and innovation is slowing down. Crop trade has come to a standstill, and we can only hope it ends soon.

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Ube Cosmic Cookie

Nutrition Facts

servings per container
Serving size
(10g)
Amount per serving

Calories

35

% Daily Value*

Total Fat 1.5g

2%
Saturated Fat 1g
5%
Trans Fat 0g

Cholesterol 5mg

2%

Sodium 40mg

2%

Total Carbohydrate 5g

2%
Dietary Fiber 0g
0%
Total Sugars 3g
Includes 3g Added Sugars
6%

Protein 0g

Vitamin D 0mcg
0%
Calcium 11mg
0%
Iron 0mg
0%
Potassium 6mg
0%
*The % Daily Value (DV) tells you how much a nutrient in a serving of food contributes to a daily diet. 2,000 calories a day is used for general nutrition advice.

Blue Moon Milk

Nutrition Facts

servings per container
Serving size
(236g)
Amount per serving

Calories

200

% Daily Value*

Total Fat 7g

9%
Saturated Fat 4g
20%
Trans Fat 0g
Cholesterol 20mg
7%

Sodium 95mg

4%

Total Carbohydrate 27g

10%
Dietary Fiber 0g
0%
Total Sugars 27g
Includes 16g Added Sugars
32%

Protein 7g

Vitamin D 3mcg
15%
Calcium 250mg
20%
Iron 0mg
0%
Potassium 291mg
6%
*The % Daily Value (DV) tells you how much a nutrient in a serving of food contributes to a daily diet. 2,000 calories a day is used for general nutrition advice.