For commodity prices in The West, there is only one direction, Up!
European and US markets under severe inflationary pressure
With the Russia-Ukraine war following Covid 19, global supply chains have been severely disrupted
The threat of civil strife looms over the Western world
Consumers across the UK and the USA should expect prices to continue rising. With inflation expected to peak at 10% in the UK at the end of the year, citizens should fear the impending doom precipitated by governments across the Western world. If the Covid crisis wasn't a spanner enough, the Russia-Ukraine war has posed fresh challenges for the ordinary masses in the Global North.
One of the primary causes for inflationary tendencies across European and US markets is the rise in food prices, especially dairy products. As per a CNN report, milk, cheese and eggs rose by a sharp 9.5% in the UK. Whole milk is now 12% dearer than what it was a year ago. In the US, wholesale milk prices shot up by a barely believable 38% and that of whole milk by 15%. While Covid disrupted global supply chains resulting in an initial inflationary push, the war in Ukraine has severely affected the supply of products such as wheat, fertilizer and fuel.
While fertilizer prices were already on the rise due to an increase in natural gas prices- a key ingredient in urea and ammonium nitrate-based fertilizers- the near boycott of Russian and Belarussian products since the breakout of the war has further intensified the crisis. According to the same report, the UK imports 18% of its urea and 7% of its ammonium from Russia.
"If you look at April 2022 compared to April 2021, you see fertilizer prices almost four times where they were before," exclaims Robert Craig, a dairy farmer from northern England to CNN.
Jessica Langston, who runs a family farm in Derbyshire, expresses similar concerns. Speaking to the CNN, her distress is apparent:
"We get the majority of our income from milk, so we need to be producing a large amount of grass to feed [cows] through the summer and the winter."
Fertilizers aren't the only cause of concern for farmers in the UK (and beyond). Fuel is another crucial resource. Since the intensification of the war, Western leaders' have imposed an almost blanket bank on Russian imports, including fuel. With tractors and other machinery running for close to 16 hours a day, fuel prices have doubled for farming families compared to last year. To make matters worse, feed prices for cattle have also risen sharply. With the breadbaskets of Russia and Ukraine accounting for a quarter of wheat exports to Europe, the conflict has crippled farmers across Europe. In the UK feed prices have surged by almost 70% in the past couple of years. With a ban on Russian imports and Russia-imposed blockades on Ukrainian ports, the supply of feed materials- wheat, maize and soy- has become extremely scarce.
If conditions don't improve soon, experts argue that Europe is likely to stand on the precipice of civil strife. Speaking to CNN during a SABEW Conference, David Beasley, head of UN's World Food Programme cautions:
"If we're not there with a safety net program, then the political extremists or whatever the case may be, will exploit that," Beasley said during the SABEW Conference in New York. "Next thing you know, you've got riots, famine, destabilization and then mass migration by necessity."
Scraping the surface, one gets a sense that the contradictions inherent in Western geopolitical assertion are turning inwards. For onlookers in the Global South, we are perhaps entering into a new epoch where Western civilization as we know it is fast hurtling towards imminent death.