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Spain's shopping basket is more expensive because of the war over Ukrainian cereal

Cereal is Putin's secret weapon for putting pressure on Europe.

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Spain's shopping basket is more expensive because of the war over Ukrainian cereal

Cereal is Putin's secret weapon for putting pressure on Europe. He is not just playing with his own blockade of Odessa port, where Ukraine exports millions upon millions of tons per year, to try and deprive the 400,000,000 people around the world who depend on Ukrainian grain. The shortage of grain will soon be felt in Spain. Our country produces 25.4 million tonnes of grain annually, while the Spanish consume 36. This makes us a net exporter.

Espana is a net importer of cereal

In millions of tons

Production

25.4

Consumption

36

Espana is a net importer of cereal

In millions of tons

Production

25.4

Consumption

36

Espana is a net importer of cereal

In millions of tons

Production

Consumption

25.4

36

Espana is a net importer of cereal

In millions of tons

Production

Consumption

25.4

36

The solution to growing more is not so simple. It is not easy. Brussels has offered to allow the cultivation of the land it had been forced to maintain fallow. However, the area is only 600,000 hectares and it isn't known if farmers will be willing to work again due to rising production costs. Juan Carlos Higueras, an expert professor on the agri-food sector at EAE Business School, says that cultivating fallow requires rotating the land more. This depletes the land for new crops and also requires more fertilizers.

Farmers win

Land for your crops

Millions of hectares

Surface

in Barbecho

Surface to Pass

The cultivation of the pasture

0.6

2.2

21.5

50.6

Area total

From Spain

Area total

For cultivation

Farmers gain ground

For your crops

Millions of hectares

Surface

in Barbecho

Surface to Pass

The cultivation of the pasture

2.2

21.5

50.6

0.6

Area total

For cultivation

Area total

From Spain

Land is available to farmers for their crops

Millions of hectares

50.6

Surface

Total of

spain

21.5

Surface

Total for

The crop

2.2

Surface

in Barbecho

0.6

Surface

What will happen?

per meal or

crop

Land is available to farmers for their crops

Millions of hectares

50.6

Area total

From Spain

21.5

Area total

For cultivation

2.2

Areas of fallow

0.6

Surface to Pass

The cultivation of the pasture

Even though there is an increase in demand, small farmers will not be able to benefit. Prices for fertilizers and energy have increased, as well as fuels. Farmers are now paying much higher feed prices for their animals which leads to an increase in meat prices. Higueras says that there will be less chicken meat in supermarkets after summer because these animals eat a lot more grain than farmers, and that "will reduce production and increase prices a lot."

The PAC agreed to temporarily relax phytosanitary requirements (insecticides), for cereal imports from countries that were previously more closely monitored, like Argentina and Brazil. This will help to "cushion" the effects of the shortage of Ukrainian grain but it will not fully cover the fall. To that must be added the import costs from other parts of the world with cargo ships crossing the Atlantic.

Countries of origin

Imports

Spanish cereal

In 2021

Millions of Euros

Canada

France

113.2

744.8

800

Lithuania

Ukraine

600

400

124

545.4

200

Poland

Brazil

409

131.9

Bulgaria

Romania

216.5

373.9

The countries of origin

Spanish cereal imports for 2021

Millions of Euros

Canada

France

744.8

113.2

800

600

Lithuania

Ukraine

400

124

545.4

200

Brazil

Poland

409

131.9

Bulgaria

Romania

216.5

373.9

Imports from countries of origin

Spanish cereal companies to be established in 2021

Millions of Euros

113.2

744.8

Canada

France

800

600

124

545.4

400

Ukraine

Lithuania

200

131.9

409

Poland

Brazil

216.5

373.9

Bulgaria

Romania

In 2021, Spanish cereal imports from countries of origin will be made in the following countries:

Millions of Euros

113.2

744.8

Canada

France

800

600

400

124

545.4

Ukraine

Lithuania

200

131.9

409

Poland

Brazil

216.5

373.9

Bulgaria

Romania

When Putin was unaware that the invasion would occur a few months later in 2021, Spain imported cereals mostly from France, Ukraine, and Brazil with a total of 3,343 millions euros. The situation was changed when the conflict broke out. Our country was the main supplier of cereals to Ukraine in January and February (222.5 million and 198 millions euros, respectively), nearly doubling our purchases from France. However, the downward trend started in March and ended April with just 5 million euros worth of Ukrainian grain imports. Antonio Bonet, president of Exporters Club, says that Ukraine has been, along with France, the main supplier for this product to Spain since the dawn of the 21st Century. He alternates between the first and the second position.

Evolution of

Imports of Spanish cereals in 2022

Millions of Euros

ROMANIA

UKRAINE

FRANCE

January

February

March

April

222.5

198.1

107.2

86.7

73.5

113.6

66.5

47.9

29.1

37.5

36.4

5

TOTAL

462

381

181

ROMANIA

UKRAINE

FRANCE

Evolution of imports

Spanish cereal companies in 2022

Millions of Euros

ROMANIA

UKRAINE

FRANCE

January

February

March

April

222.5

198.1

107.2

86.7

73.5

113.6

66.5

47.9

29.1

37.5

36.4

5

TOTAL

462

381

181

ROMANIA

UKRAINE

FRANCE

In 2022, the evolution of Spanish cereal imports

Millions of Euros

January

February

March

April

UKRAINE

222.5

198.1

107.2

86.7

FRANCE

73.5

113.6

66.5

47.9

ROMANIA

29.1

37.5

36.4

5

TOTAL

462

381

181

ROMANIA

UKRAINE

FRANCE

In 2022, the evolution of Spanish cereal imports

Millions of Euros

January

February

March

April

TOTAL

462

UKRAINE

222.5

198.1

107.2

86.7

381

FRANCE

73.5

113.6

66.5

47.9

181

ROMANIA

29.1

37.5

36.4

5

It is interesting that, despite Spain producing less than it consumes, it exports cereal in small quantities. In 2021, Spain sold 451 million euros worth of grain. According to the Exporters Club, it was mostly destined for Portugal (22%), France (16%) and Belgium. It also went to the United Kingdom (Algeria) and the United States. The war's outbreak has not only tempered exports but also saved more product for national consumption. In February sales were 77.1 million euros, and rose to 66 millions in April.

The evolution of Spanish cereal sales and purchase

Millions of Euros

Imports

Exports

3,343.6

450.7

2,663.1

491.9

3,212,9

459.2

3.157.5

407.4

Imports

Exports

338.4

66.3

366.4

67.5

476

77.1

464.3

32.2

The evolution of Spanish cereal sales and purchase

Millions of Euros

Imports

Exports

3,343.6

450.7

2,663.1

491.9

3,212,9

459.2

3.157.5

407.4

Imports

Exports

338.4

66.3

366.4

67.5

476

77.1

464.3

32.2

The evolution of Spanish cereal sales and purchase

Millions of Euros

Imports

Exports

3,343.6

450.7

338.4

2,663.1

66.3

491.9

366.4

3,212,9

67.5

459.2

476

3.157.5

77.1

407.4

464.3

32.2

Evolution of the purchase

Sale and purchase of grain

Spain

Millions of Euros

3,343.6

450.7

338.4

2,663.1

66.3

491.9

366.4

Exports

3,212,9

67.5

459.2

476

3.157.5

77.1

407.4

464.3

Imports

32.2

Because different countries have different cereals, this is why it happens. Spain is home to large amounts of soft wheat and barley, but it also needs to import nearly all of its corn. In 2021, it bought 510 million euros from Ukraine, which represents 93% of the total amount of cereals it buys.

What kind of cereal?

Spain

In %

42.9

BARLEY

WHEAT

SOFT

28

CORN

15.7

WHEAT

STAND

3.2

What kind of cereal is Spain producing?

In %

42.9

BARLEY

WHEAT

SOFT

28

CORN

15.7

WHEAT

STAND

3.2

What kind of cereal is Spain producing?

In %

CORN

WHEAT

STAND

WHEAT

SOFT

BARLEY

42.9

3.2

15.7

28

What kind of cereal is Spain producing?

In %

CORN

WHEAT

STAND

WHEAT

SOFT

BARLEY

42.9

3.2

15.7

28

Evolution of

In 2021, Spanish Imports to Ukraine by Type of Cereal

Millions of Euros

CENTENO

CORN

WHEAT

BARLEY

BIRDSEED

23.5

3,5

7.6

510.3

0.5

TOTAL

545.4

In 2021, the evolution of Spanish imports into Ukraine by type and cereal

Millions of Euros

CENTENO

CORN

BARLEY

WHEAT

BIRDSEED

23.5

3,5

7.6

510.3

0.5

TOTAL

545.4

Spanish Imports: Evolution

Ukraine by type and cereal in 2021

Millions of Euros

CORN

WHEAT

CENTENO

BARLEY

BIRDSEED

23.5

3,5

7.6

510.3

0.5

TOTAL

545.4

In 2021, the evolution of Spanish imports into Ukraine by type and cereal

Millions of Euros

CORN

WHEAT

CENTENO

BARLEY

BIRDSEED

23.5

3,5

510.3

0.5

TOTAL

545.4

How will this affect consumers? For the rest of the year, there will be even greater price increases. The EAE Business School expert says that all products made from flour such as pizza, pasta, pastries, and bread will increase in price over the coming months. Gelt's most recent report shows that food staples increased five times faster than headline inflation between April and May. Kantar, a consulting firm, warned that 4 percent of Spanish households cannot afford to buy even the most basic food items in their shopping basket.

The evolution of agricultural food since 2021 can be seen. An Allianz report estimates that there was an increase of 31% in agricultural food. This is despite the war having exploded. They predict that they will rise another 23% by 2022 because of the increase in inputs (fuels, electricity, fertilizers ).

The worst part is that, despite an increase in these foods' prices, the study calculates retail prices have been adjusted to 6%. This means that only half of the producer price increase has been transferred to consumers.

Ukraine has 25 million tonnes of grain left over from previous harvests, which is difficult to sell. European countries have begun to get this merchandise out, and to be able to sell it. Spain is leading the initiative to start a project that will allow for 8,000 tons of grain from Ukraine between July and September.

In collaboration with France, Luxembourg, and Poland, the initiative involves transporting the grain by train from France to Spain. From there, silos can be placed in several ports along the Mediterranean coast like Tarragona, Tartagena, and Barcelona. Then, it can then be shipped to your destination country.

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