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Agflation accelerates due to the Russia-Ukraine crisis
Agflation, in which prices of food prices rise higher than the price of other goods and services, is becoming evident as the war in Ukraine, a leading crop producer, continues.
Agflation is a term that coins the words agriculture and inflation.
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Ukraine accounts for one fifth of the world¡¯s corn exports, but the war has disrupted the country¡¯s food distribution network and many farmers have missed out the sowing period. Prices are expected to further rise, however, due to the international community posing sanctions on Russia, which would impact fertilizer prices. Some say Ukraine¡¯s corn production would drop by 40% from last year.
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Prices of wheat and soybeans, which Ukraine takes up a large proportion of, continue to rise. Wheat prices are rising as well, with the U.S. and Canada facing cold spring weather. FFPI for March, compiled by the Food and Agriculture Organization of the United Nations (FAO) reached 159.3 points, 12.6% higher than the previous month, and the highest since 1990.
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