Fears of wheat shortages.
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Over the past five years, South Africa imported around 30% of its wheat from the Ukraine and Russia.
Now the conflict in Ukraine threatens to disrupt these exports, and fears of wheat shortages have pushed international prices to their highest levels since 2008. This is expected to bite South African consumers.
Russian forces launched a large-scale attack on Ukraine on Thursday, entering the country from directions, with troops heading towards its capital, Kyiv.
Both Russia and Ukraine are significant players in grain production and exports.
Russia accounts for 10% of global wheat production and Ukraine, 4%. The countries account for roughly 30% of the world's wheat exports and 20% of maize exports. They also account for 80% of sunflower oil exports, Bloomberg reported.
"That region supplies all the major global buyers, with Egypt and Turkey being the two largest wheat importers. Many emerging markets, including South Africa, rely heavily on wheat imports from the Black Sea region," said Matthew Axelrod, forex manager at DG Capital Forex.
South Africa does not produce enough wheat, and is reliant on imports.
Now the conflict in Ukraine threatens to disrupt these exports, and fears of wheat shortages have pushed international prices to their highest levels since 2008. This is expected to bite South African consumers.
Russian forces launched a large-scale attack on Ukraine on Thursday, entering the country from directions, with troops heading towards its capital, Kyiv.
Both Russia and Ukraine are significant players in grain production and exports.
Russia accounts for 10% of global wheat production and Ukraine, 4%. The countries account for roughly 30% of the world's wheat exports and 20% of maize exports. They also account for 80% of sunflower oil exports, Bloomberg reported.
"That region supplies all the major global buyers, with Egypt and Turkey being the two largest wheat importers. Many emerging markets, including South Africa, rely heavily on wheat imports from the Black Sea region," said Matthew Axelrod, forex manager at DG Capital Forex.
South Africa does not produce enough wheat, and is reliant on imports.
