Due to the war in Ukraine, fuel and food prices will rise until the end of 2024. Wheat prices, for example, according to the World Bank forecast, will increase by more than 40% and reach record highs.

The World Bank warns about this.

“This is the biggest shock in the consumer goods market since the 1970s. These events increase the likelihood of stagflation,” predicts Indermit Gill, vice president of the World Bank Group for sustainable development.

The cost of many foodstuffs is expected to rise sharply. The UN food price index already shows that they have jumped to their highest level in 60 years.

It is predicted that the price of wheat will increase by 42.7% and reach new highs in dollar terms. The price of barley will increase by 33.3%, for soybeans – by 20%, for oil – by 29.8%, for chicken meat – by 41.8%. The reason is a sharp decline in exports from Ukraine and Russia.

In addition, due to the war, the volume of grain and oilseeds supplies from Ukraine fell by more than 80%, and these export losses during the year “are equal to about 10 days of the world’s food supply.”

“We expect crop supplies to drop due to a weak crop in Canada, a low crop in South America, and now due to disruptions in the Black Sea region. This will keep the world grain markets under pressure for the next few years,” said the executive director of the international agro-industrial corporation Archer Daniels Midland Juan Ricardo Luciano.

The cost of agricultural products and metals is expected to rise by almost 20% this year. In addition, energy prices will rise the most in 2022, by more than 50%. And only during 2023-24 will they even out somewhat.

Russia produces about 11% of the world’s oil and ranks third in terms of its share of the global oil market, but “disruptions from the war are expected to have long-term negative effects” as foreign companies go and access to technology due to sanctions is shrinking. Thus, oil prices are expected to remain high in 2024, with a barrel of base Brent crude this year projected to cost $100 on average, leading to widespread inflation.

“Despite expectations that commodity prices will peak in 2022, they will remain significantly higher than previously forecast,” the report said.

It is noted that other countries can help solve the supply shortage caused by the war in Ukraine. However, a projected 69% increase in fertilizer prices could result in “farmers using less fertilizer and crop yields.”

Read also: