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The suspension by Russia of the grain export agreement through the Black Sea, which allowed Ukraine to sell millions of tons, will bring various consequences to Latin America. The most obvious is the increase in food prices, which has already punished the region since the start of the war, although many producing countries could benefit.
The end of the safe corridor for Ukrainian cereals is already punishing markets around the world, and Latin America will be no exception. This new scenario could, however, benefit producing countries in the region, such as Argentina, Brazil and Paraguay.
But this commercial rebound could be a double-edged sword, especially for many Caribbean countries, which are highly dependent on imports from Mercosur, and whose inflation levels could skyrocket.
international prices
Marcelo Elizondo, president of the International Chamber of Commerce of Argentina, predicts an almost immediate impact, although he agrees with all the experts that we are not facing the shock suffered by the markets at the beginning of the conflict.
“Latin America is self-sufficient. I don’t see scarcity problems. I do see some pricing issues. The increase in the prices of agricultural exports in Latin America also generates an inflationary impact within Latin America, because international prices rise and Latin America produces for its market with the same international prices as abroad,” explains Marcelo Elizondo.
“In the southern hemisphere, they are just now in the process of planting the next crop. We are in the middle of winter, so a good part of the production has already been sold and the next production may be sold when the impact of the lifting of this agreement has already passed ”, he adds.
“There will not necessarily be more hunger”
It is also worrying that famine will worsen, in a region where 6% of the population suffers from hunger, according to data from the Food and Agriculture Organization of the United Nations (FAO). However, the current good health of world stocks, or the end of the drought in Argentina, have considerably reduced dependence on Ukraine.
“As always happens, when go up the prices, also goes up the production. So, the relationship global from stock to consumption now this around of the 33%, this by on of the average of the latest three either four decades and is further worrying in he case of Haiti. But Haiti further that wheat, it that buys is rice. He wheat is a product caloric, but Latin America also has very diversified his production internally,” says Eugenio-Diaz Bonilla, an analyst at the International Institute for Food Policy Research.
“No I’m saying that No there is impact, it that I’m saying is that No necessarily by this only goes to to have further hungry in Latin America. The prices, Yeah good went up, are still by below of the leap very strong that was to the start of the war”, emphasizes the researcher.
In addition, essential agricultural products in Latin America, such as sugar, coffee or soybeans, continue to be exposed to global problems in the supply chain of fertilizers and pesticides.
