The rise in wheat prices globally threatens severe repercussions in the Yemeni market
English - Thursday 03 March 2022 الساعة 06:21 pm
Aden, NewsYemen, special:
The wave of rising wheat prices globally threatens with negative repercussions on the prices of grains in the Yemeni market, and the living situation of the population, 78 percent of whom live below the poverty line. In a country that depends on imports to meet more than 95% of its wheat consumption needs.
Yesterday, global wheat prices rose to their highest levels in more than a decade, with importers concerned about the possibility of disruption to global supplies due to the Russian military operation in Ukraine, which began on the morning of Thursday, February 24, and Western sanctions on Moscow
The value of wheat futures contracts reached 984 cents a bushel at the highest point in trading on Tuesday, the highest level since April 4, 2008, when the price of wheat traded at 985.5 cents a bushel.
Russia is the largest wheat exporter in the world, while Ukraine is the fifth largest, meaning that out of 207 million tons (the volume of wheat trade internationally), 17% of the amount comes from Russia and 12% from Ukraine, according to CNBC.
The general trend of local wheat prices is witnessing a continuous increase, which has exposed the Yemeni citizen to severe waves of inflation in its necessary strength. Where the local prices of wheat have risen over the past years to record levels in the local market, affected by the repercussions of the ongoing war, fluctuations in global wheat prices, and the depreciation of the local currency against foreign currencies.
The repercussions of the ongoing war, the high cost of insurance for shipments, and the turmoil in the global market are also pushing up wheat prices in Yemen.
Grain production in Yemen declined by 130 percent over the past seven years, as grain production, including wheat, gradually deteriorated from 250 thousand tons to 95 thousand tons at the beginning of 2020, a decrease of 16.6% annually.
The study, prepared by the Economic Studies and Forecasting Sector at the Ministry of Planning in cooperation with UNICEF, estimated the local needs of wheat and wheat flour imports at about 350 thousand metric tons per month.
The study, "Wheat in Yemen, the growing food gap despite its economic feasibility," showed that the self-sufficiency rate decreased from the wheat crop to less than 5%, bringing the food gap in wheat to more than 3.4 million metric tons annually and is constantly expanding.
The study, issued by the Economic Studies and Forecasting Sector of the Ministry of Planning and Cooperation and funded by UNICEF, estimated the self-sufficiency rate at about 2.8% only, in contrast to the growing consumption needs of the population, and the local prices of wheat increased by 470% between January 2015 and October 2021.
According to the study, the local production of wheat has declined year after year in contrast to the large volume of consumer demand of the population, which is estimated at more than 3 million metric tons annually, and the monthly needs of wheat and wheat flour imports are estimated at about 350 thousand metric tons.
Yemen imports most quantities of wheat from Australia, America and Russia, and its import bill has become a burden to the economy and the national currency, exceeding 700 million dollars annually.
The number of active wheat importers is about 6 to 7 in Yemen, which reflects the state of monopoly that prevails in the wheat import market.
Wheat has become one of the most important food crops imported by the private commercial sector or in the form of humanitarian aid, which reflects a fundamental flaw in securing the strategic wheat commodity for the Yemeni citizen.
