Russia Ukraine Impact of war: kitchen staples like milk, chicken, oils, wheat and spices become expensive due to Russian-Ukrainian war
The war has directly affected the prices of sunflower oil, while the prices of wheat, coriander, jeera, maize and soybean meal are due to the indirect effect of the drying up of supplies of these products. from Russia and Ukraine.
Rohit Ahuja, head of research at ratings agency ICRA, said: “At the initial stage, we believe the implications for India would be limited to higher commodity prices. However, there are risks of an escalation of this conflict in other parts of Europe and a further spike in commodity prices”.
“This price increase is due to the rising costs of energy, packaging, logistics and livestock feed. Thus, the overall cost of operating and producing milk has increased,” Amul said in a statement.
The prices of milk and dairy products have been heading north in the world such as in India for the past 4-5 months. There is a global shortage of milk protein as cattle have been slaughtered due to covid-induced demand destruction, while in India, where cow slaughter is not permitted, the cycle of production has been extended.
Dashrath Mane, Chairman of Sonai Dairy, the country’s leading retail brand supplier and the second-largest milk powder exporter after Amul, said, “The export demand for milk powder is huge and yields have almost doubled. “.
In a recent research note on the dairy sector, Crisil had said: “Organized dairy industry revenue in India will rebound 12% on-year this financial year to Rs 1.6 lakh crore, from weak growth by around 1% last fiscal year, riding on a strong recovery in demand for most value-added dairy products, stable fluid milk sales and retail price increases during the fiscal year.
The Russian-Ukrainian conflict has dimmed any hope of relief from high cooking oil prices for consumers, who have been paying historically high prices for nearly two years.
Chicken prices have jumped 25% since January and industry veterans expect another 10% to 50% increase in different parts of the country in March due to a severe shortage of animal feed .
Balram Yadav, Managing Director, Godrej Agrovet, said: “Our production of chicks has declined by 20% due to the disruption in demand caused by the pandemic in contact industries. After Covid we expect a huge increase in demand.
BV Mehta, Executive Secretary of the Solvent Extractors Association, said: “Of the 2.5 million tonnes of sunflower oil consumed in India, around 90% is imported from Ukraine and Russia. The opening of the Rupee Ruble channel can facilitate these imports. India has a large stock of unground soybeans and a record mustard crop is coming. »
The prices of sunflower oil on the international market increased by about 5-10% in 8-10 days.
“Due to the sanctions imposed on Russia, it is now difficult to open a letter of credit (LC) to import sunflower oil. We have asked the government to explore the possibility of obtaining the exclusion of sunflower oil from sanctions like European countries have done for oil and gas,” said Sandip Bajoria, CEO of Sunvin Group, a consultancy.
Spice prices are also on the boil due to local shortages and strong global demand. “Coriander prices have increased by around 30% in recent months as the harvest is smaller. Now we expect an increase in the export demand for Indian coriander as supplies from the Black Sea region will be limited,” said Ashwin Nayak, Founding President of the Federation. of Indian spices stakeholders.
Jeera prices jumped 25-30% in four months due to lower production and global demand. India is now the sole leading supplier of jeera as supplies from countries like Afghanistan, Turkey and Syria have been disrupted due to geopolitical reasons.
Like coriander, wheat prices in India are expected to rise due to the indirect effect of the war. Most of the wheat stock in India is held by the government agency Food Corporation of India (FCI), which does not export the product. However, the demand for Indian wheat in the international market has increased since the outbreak of the war.
“Wheat prices at Kandla Port have gone from Rs 2200/quintal to Rs 2350-2400/quintal over the past 4 days. FCI saying its next tender this week will be the last one in March, we believe The prices of wheat and wheat products may rise over the next 10-15 days. The next crop will not be harvested until after Baisakhi which falls on April 13,” said Sanjay Puri, former chairman of the Roller Flour Millers Association of India.