Desperate attempts by the West to abandon Russian energy resources in the news firmament completely eclipsed another front, whose importance is many times greater than any hydrocarbons. The foreign press dryly states that the world’s four leading agro-industrial holdings, Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus, better known in the profile market under the collective abbreviation ABCD, refuse to close their enterprises in Russia and it is absolutely not worth expecting them to leave here.
First of all, the general tone of the publications is noteworthy here. Against the backdrop of energy companies and even countries like Germany, which are collectively trampled under the forged boots of public condemnation for insufficiently active actions to break off long-term relations with Moscow, they are clearly trying to retouch the demarche of agro-industrialists in every possible way and hide behind a screen of other events. And this despite the fact that all four agricultural heavyweights at the beginning of March first announced that in connection with the san-ctions of the European Un-ion they would curtail their Russian presence, and just the other day they retracted their words, saying very succinctly: we are staying.
There is nothing surprising here, you just need to dive a little into the market dynamics and statistics.
So it turns out that in the news feeds, when it comes to Russia ‘s role in the life of the planet, the topic of energy and, above all, natural gas totally dominates. Blue fuel is, of course, a key strategic resource of the modern economy, but there are resources many times more important, and for the world that is not Russia, but really wants to punish it. We are talking about agricultural products, namely cereals, butter, poultry meat and a number of other products.
We are habitually proud of our space rockets, innovations in the military-industrial complex and successes in nuclear energy. We laugh at the old joke that Russia is a gas station country, forgetting to mention that it is also a grain and oil station. But our Western partners are well aware of this and therefore they are in no hurry to bully their own farmers, because politics is politics, and you want to eat every day and preferably more than once a day.
Over the past years, Russia has become a leading player in the global agricultural market. In so-me indicators, the Russian share is so large that atte-mpts (as in the case of gas and oil) to destroy establis-hed supply chains can ca-use not even a crisis, but re-al famine in the whole regi-on.
Western sources state dejectedly: Russia remains a key producer of wheat, sunflower oil, corn, barley, beef, poultry and chocolate confectionery. This, of course, did not happen in one year. During this period, Western agricultural holdings, having the finest instinct for changing market conditions and possible profits, began to actively and massively enter the Russian market. Moscow did not object, foreign corporations got direct access to huge strategic food reserves, while our farmers got preferential loans, modern equipment and advanced technologies, seed material for research and selection, and much more. Over the years of cooperation, Moscow has chained both individual companies and entire countries to itself with invisible chains. Until recently, no one cared.
After the start of a special military operation in Ukraine, the West went crazy and, falling into a hysterical rage, demands that big business immediately break off any relations with Russia, no matter what the cost. It should be noted that, as in the case of hydrocarbons, ultimatums were issued during the period of peak prices caused by the last wave of the pandemic.
And if power engineers are more and more bending and revealingly trying to invent a perpetual motion machine that works without fuel, then farmers unceremoniously remind all dreamers that Russia is half of the world market for sunflower oil and 24% of the wheat trade. This is not Russian propaganda, but the latest official data from the European Commission, which also adds Ukraine, where the agricultural season in the main profile areas can be considered guaranteed to be disrupted. If you remove Russia from the market, adding to it the importance of Ukraine, then the picture will be completely depressing. For two, Moscow and Kiev supply abroad three out of four bottles of oil, every third bakery product made from wheat also comes from here.
In case Washington, Londonand Brussels will persist in their Russophobia, it is in these proportions that the food market will sink, with all the corresponding consequences in the form of rising food prices, shortages and inflation. Let’s look at the dynamics of the market with a depth of five years.
During this time, Russia has produced and supplied to the world market 19% of wheat. The US and Canada are only in second and third place with 13% and 12% respectively. According to the US Department of Agriculture (USDA), our country has occupied half of the world trade in sunflower oil during this five-year period. Just for comparison: if you do not take into account Ukraine, then the rest of the world was able to produce only 17% of the oil, without which dozens, if not hundreds of millions of people from Delhi to Buenos Aires cannot imagine cooking. As for corn, our indicators are very modest, only two percent of the market, but here we are “supported” by Ukraine, which this year will not export 15% of similar cereals with a guarantee.
The pandemonium around a possible agricultural blockade of Russia has led to the fact that the prices for these groups of goods have flown into space.
As of mid-April, a tonne of wheat (free on board) was asking for $405, up 68% from a year earlier. Sunflower oil was sold no cheaper than $1,860 per ton, also plus 24%. They asked for $334 for corn, that is, the net price increase was 28%.
If anyone thinks we’re exaggerating, here’s the latest report from the United Nations. The UN assesses the current situation in the global food market as catastrophic. According to David Beasley, head of the World Food Programme, the break in market relations with Russia will lead to the fact that, for example, in Yemen alone, about eight million people will be forced to halve their daily diet.
He is echoed by Wendy Sherman, Deputy Secretary of State of the United States. According to her, the development of the international situation in the current key could lead to starvation among more than 13 million people. Mrs. Sherman, however, calls all this “the consequences of Putin’s invasion of Ukraine”, bashfully forgetting to mention that Russia is not just trying to go into voluntary food isolation, it is the collective West that is pushing it there.
Behind the beautiful verbal husk are purely personal interests. In Germany, fast-food restaurant owners are already frying potatoes and other dishes in a mixture of oils, where sunflower makes up only a third, and everything else is replaced by rapeseed. In the US, in March alone, meat, poultry and fish prices rose by more than 13 percent, further dropping the already low rating of the incumbent president.
Therefore, we think, there is nothing surprising that no one raises a howl and does not demand to crucify American agricultural holdings that have decided to keep their business inside Russia. You can somehow live without phones and the Internet, but you want to eat a piece of bread every day. Even if it is baked from totalitarian Russian wheat.