The destabilization of Ukraine by the Russian invasion has already triggered significant global consequences for the food industry. Speaking to FoodIngredientsFirst, representatives of the international agri-food sector shared their forecast of the widening repercussions of the conflict, heightened by new reports of Russia’s bolstered advances. 

“Given the proximity and the big volumes of our trading partners in Russia and Ukraine, and possible exclusion of Russia from the marketplace, a big issue here is that we will not be able to replace [deficiencies in exports from Russia and Ukraine] one-to-one,” remarks Pekka Pesonen, secretary general of European farming association Copa-Cogeca.

“We do not have any other trading partners that would be so close and readily available with reasonably big volumes of the same size as these two nations,” he stresses.

“We now have reason to expect that a coalition of our trading partners would be able to help offset the impact with their trading volumes. We’re losing two big partners, but replacing that with multiple partners in other parts of the world.”

Notably, both Ukraine and Russia are key agricultural exporters for the global market. Ukraine is the EU’s fourth-biggest external food supplier and provides the bloc with a quarter of its cereal and vegetable oil imports, including nearly half of its maize.

“In the case of wheat, we expect that to a certain extent it’s possible to source this raw material from Australia and South America, as well as Canada, which is already within our bilateral trade agreement,” says Pesonen.

Major grain traders are preparing for potential volatility and danger. Jackie Anderson, director of external communications at agri-food giant ADM, tells FoodIngredientsFirst: “We are actively monitoring the situation, and continually keep the safety of our colleagues as our top priority wherever we operate.”

“Currently our facilities in Ukraine are not operating, following security protocols and government guidelines. ADM will use the full breadth of our global and integrated supply chain to support the needs of our customers around the world as we manage through this difficult situation.”

ADM employs more than 630 people in Ukraine and operates an oilseed crushing plant in Chornomorsk, a grain terminal in the port of Odessa, five inland silos, one river silo and a trading office in Kiev.

Other key agri-food players such as Olam Group are continuing to keep a close eye on the developments in Ukraine and Russia.

Pekka Pesonen emphasizes that Copa-Cogeca is currently monitoring the situation closely and following up on these developments with its members across Europe’s agri-food chain. 

“Depending on the situation, we would call for market management measures to be activated in the EU,” he says. “I think the situation is very volatile. We do not have the full picture yet and therefore I think it is key to monitor the situation.”

“But it’s good to point out that during the COVID-19 crisis, the agriculture sector – not only in Europe but also internationally – showed remarkable resilience. We are quite optimistic that some of those imbalances could be offset by our normal market actions and possibly with the involvement of the market operators at an institutional level.”