Price of Maltese wheat supplies under threat following Ukraine invasion

The Russian invasion of the Ukraine is being played out just under 2,000 kilometres away, but Malta is already starting to feel the indirect effects of the Russian aggression.

Malta sources most of its wheat, corn and barley from the Ukraine – and Russia to a lesser extent – and importers are already struggling to keep up with price hikes.

Experts estimate that the price of Ukraine wheat alone has already gone up 20% since 24 February, when the first Russian tanks rolled into Ukraine. And Malta too is feeling the brunt.

Robert Cauchi, CEO of the Koperattiva Produtturi tal-Ħalib, told MaltaToday that Maltese importers were facing unprecedented challenges. “We have never been in this kind of situation before, where a war in Europe is resulting in steep price increases,” he said.

He confirmed that KPH members and others sourced most of their livestock feed from wheat and corn imported from the Ukraine and Russia.

And now they were left having to absorb the price increases themselves without passing the burden on to their consumers. “We are very conscious of the cost of living and how some products’ prices have been increasing over the past couple of months,” Cauchi said. “We are doing everything we can to make sure our consumers do not suffer any further price adjustments.”

Cauchi said the KPH had already been in discussion with the government to raise its concerns about the situation. 

He said much like others, they were already starting to look at possible alternative sources of wheat, corn and other grains.

Livestock feed is mostly composed of corn, sorghum, barley, and oats. Corn is also processed into a number of food and industrial products including starch, sweeteners, corn oil, beverage and industrial alcohol, and fuel ethanol.

And even when Maltese enterprises find other sources for grains, prices will continue rising since the total global supply is under unprecedented stress, following the Russian invasion.

“This is not a supply issue – we will not be running out of grains – this is purely a costing issue,” Cauchi said. “And everyone else is facing the same challenges.”

In fact, the European Commission quickly warned the EU agri-food sector to brace itself for impact, both now and in the long term, following the Russian invasion.

Together, Ukraine and Russia account for 30% of world trade in wheat, 32% of barley, 17% corn and over 50% of sunflower oil and seeds, Michael Scannell from Commission’s DG AGRI explained during a meeting of the European Parliament’s agriculture committee lasy week.

He warned that this heavy reliance on such a turbulent part of the world would carry severe consequences for the EU’s agri-food sector.

“The consequences of this Russian aggression will have a major impact on our agri-food sector. And it will be painful, but we have to suffer that pain,” he concluded, standing in solidarity with Ukraine and with the decisions taken by the EU to impose sanctions on Russia. 

MaltaToday also spoke leading bakery and confectionery to Maypole, a. A spokesperson for the company said that thus far, they were using existing stock and had not experienced any price hikes when purchasing source materials.

However, the spokesperson said, the company was closely following events to stay abreast of developments and planning accordingly.

Foreign minister Evarist Bartolo told MaltaToday earlier this week that Malta would feel economic repercussions from the Ukraine war, referring specifically to the price of energy, food, metals and microchips. “The economic effects are serious, Ukraine is one of the main grain producers in the world and so we could well feel the effects of this. Prices of wheat are now at the highest levels they’ve been in 30 years,” he said. 

This year, Ukraine is predicted to account for 12% of global wheat exports, 16% for corn, 18% for barley and 19% for rapeseed.