Ukraine conflict pushes wheat prices up, stratgeic stockpile can last a year

عمال يقومون ب اعداد مادة الخبز و المعجنات في وسط البلد تصوير امير خليفه (1)
(Photo: Ameer Khalifeh/Jordan News)
AMMAN — Because of Russia’s war on Ukraine, grain prices reached new highs in European trading sessions on Thursday, bringing the price of wheat to $384 dollars per ton at the “Euronext” group, which manages a number of European stock exchanges.اضافة اعلان

Secretary-General of the Jordanian Farmers Union Mahmoud Al-Oran told Jordan News that any political and economic crisis in the world has a direct impact on all countries. He went on to say that the wheat crisis that the world is now facing is directly related to shipping costs, insurance for transport ships, distribution difficulties, and other factors; “all of this adds up to a significant additional cost”.

Oran said that even if Jordan does not import wheat from Russia and Ukraine, wheat prices will remain high due to the impact on the demand curve.

According to Oran, Jordan needs to try to produce wheat locally and achieve self-sufficiency at a rate of 50 percent; currently its self-sufficiency does not exceed 3 percent to 5 percent.

“Even if achieving sufficiency is extremely difficult, achieving at least a percentage of it is sufficient to reduce the burden,” he said.

He also suggested that the government designate specific areas of land of some irrigated vegetable farms in the eastern and southern regions to produce wheat and barley exclusively.

Oran emphasized that this option is feasible because some vegetables, such as tomatoes, are produced in large quantities and part of it could be dispensed with.

Concerning the water that farming grain will need, Oran suggested that unlicensed artesian wells be licensed, rather than done away with, on the condition that they are used to irrigate wheat crops.

Ibrahim Al-Sharif, the head of the Jordan Farmers’ Association, told Jordan News that there are renewable groundwater basins in the southeast that neighboring countries are exploiting, adding that the government should use these basins and the large areas adjacent to them to grow wheat and barley, in particular, as this would allow Jordan to meet a large portion of its grain needs.

Sharif believes that, in light of the major political events occurring around the world, Jordan should begin providing for its own needs, as looking for other sources of import is not the best solution.

He added that Russia and Ukraine are among the biggest suppliers of wheat, so the conflict between them now may result in wheat being cut off from the market for an extended period of time, or becoming difficult to get.

According to Mohammad Loay Baybars, the head of the Agriculture Materials Traders and Producers Association, Jordan relies heavily on import for its wheat and barley needs, and because the global market has been affected by the events in Ukraine, “Jordan will be greatly and directly affected”.

According to Baybars, the Ministry of Industry, Trade and Supply assured citizens that the strategic stock of wheat and barley would last for more than a year.

“I believe this strategic stockpile will protect Jordan from the impending crisis,” he said.

Other solutions, according to Baybars, come from the global market rather than from local production. He believes that no matter how hard Jordan tries, the process of producing wheat locally will be difficult, that achieving self-sufficiency is impossible, and that at best, Jordan might achieve only 20 percent of its needs.

Yanal Barmawi, media spokesman for the Ministry of Industry, Trade and Supply, stated on the ministry’s official website that the strategic stock of wheat is sufficient for 15 months and that Jordan relies on Romania for 90 percent of its wheat imports.

He also stated that the contracts concluded with the companies supplying wheat and barley are open, and of multiple origins, and that the companies are obliged to supply under the guarantees stipulated in the contracts.

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