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Industry NewsProduceIQ: War in Ukraine impacts fresh produce markets

ProduceIQ: War in Ukraine impacts fresh produce markets

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Global trade in the 21st century is not without risk. To some small degree, every person will feel the effects of war in Ukraine. Undoubtedly, the people of Ukraine are paying the highest price for this invasion. The loss of life and freedom is immeasurable and cannot be belittled by comparatively trivial economic realities. Still, the adverse economic effects of this war are an inescapable fact, and it is vital for global economic health to traverse them the best we can, as reported by Produce Blue Book.

This past week, crude oil prices soared over $100 a barrel for the first time since 2014. Fuel prices drive agricultural input costs, fertilizer and delivered freight. As a result, energy inflation is expected to worsen.

What does this mean for domestic fresh produce markets? Costs will be higher in the long term. Known as the breadbasket of Europe, Ukraine has significant water and fertile land for agricultural production. With an estimated 100 million acres of arable land and about 25 percent of the world’s reserves of black soil, agricultural products are Ukraine’s largest export.

Though Ukraine primarily exports non-perishable crops, corn, wheat and barley comprise 73 per cent of agricultural exports, Ukraine also has significant specialty crop production. Over the last eight years, Ukraine shifted the exports of fruits and vegetables from Russia to Europe.

Losing Ukraine as a supply source may force Europe to rely more heavily on South America. In this regard, the U.S. competes with Europe for a limited supply of produce items from Peru, Chile, and other South American countries.

One of those overlapping items for export to Europe is blueberries. On the global market, Ukraine’s blueberries compete with Peru, the largest exporter of blueberries globally.

Excerpted, read the full article here.

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