Putin’s blitzkrieg, which has allowed Russian troops to reach the center of Kiev, the capital of Ukraine, threatens food supplies to the Old Continent from a country that is known as the breadbasket of Europe, since it occupies the first positions in the production and export of sunflower, barley or corn, to name a few products. Spain alone buys 42.2% of the cereals it imports from Ukraine, which could lead to a notable rise in prices.
Ukraine is an eminently agricultural state, thanks, among other things, to its remarkable geographical extension: a total of 603,548 square kilometers, larger than France. In fact, Ukraine is the first nation on the continent and the second in the world, behind Bangladesh (Asia) in percentage of arable land (56%).
ukraine occupies the third place in the world for the area of black soil (25% of the world volume). Black soils, which as their color indicates are dark in tone, are characterized by being rich in organic matter or humus, making them extraordinarily fertile.
The Slavic country is in the top positions in agri-food exports in many products. In this way, it is the first exporter of sunflower and sunflower oil in the world. In addition, it is the second world producer of barley and the fourth exporter.
Also, this Eastern European state is the third largest producer and the fourth largest exporter of corn in the world, as well as the fourth largest producer of large potatoes and the fifth of rye. Likewise, it ranks fifth in the world in the production of bees (75,000 tons); the eighth in wheat exports; the ninth place in the production of chicken eggs or the sixteenth in the world in cheese exports.
In the set of goods, according to ICEX data corresponding to 2020, Ukraine ranks 53rd in our export destinations, and 38th among our suppliers. Spain is the seventeenth supplier of Ukraine and the twelfth buyer. Nevertheless, the Spanish trade balance with this country has been in deficit for more than a decade. Specifically, it reached 753 million euros, 24% lower than that registered in 2019 (1,000 million euros). Exports in 2020 rose to 506 million, 17.5% less.
As for food, Spain exports to Ukraine mainly fish, crustaceans and molluscs (4.9% of the total and decrease of 6.2%), as well as canned vegetables or fruit and juices (4.1% of the total and an increase of 17.1%); while import cereals (42.2% of the total and decrease of 36.2% compared to 2019); sunflower oil (25% of the total and an increase of 8.3%) and waste from the food industry (4.6% of the total and a decrease of 22%).
The Spanish Federation of Food and Drink Industries (Fiab) represents 30,000 companies in the sector, with a production value of 129,854 million euros, and a gross added value of 15% of the total industry. The sector exports worth 33,945 million euros and obtained a trade surplus of 12,608 million euros in 2021. Hence, the armed conflict in Ukraine is viewed with concern.
From Fiab, they point out that “although it is premature to assess the economic impact that the situation between Ukraine and Russia is having, we are very concerned about the great impact that it could have in the face of the import of certain raw materials used by our industryas well as the repercussion on the already punished world energy scene, and that could suppose an imbalance for the competitiveness of the sector, especially SMEs”.
Regarding exports, from the federation they point out that “the impact would be less, since Ukraine ranks 36th in the ranking of Spanish exports in food and beverageswith a sales figure of approximately 140 million euros in 2021″.
As far as Russia is concerned, at Fiab they recall that “in 2014 the Russian government imposed a ban on certain foods and drinks from the EU, which reduced sales in this country. In 2021, exports to Russia stood at number 27 in the ranking of destination countries for our exports, with a value of 196 million euros”.
“We convey our concern about a conflict in which, beyond economic issues, there are lives at stake. For this reason, above all, we want the dialogue to resume to find a peaceful solution,” they conclude in Fiab.