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Even in the absence of the war in Ukraine, the year 2022 started gloomily, with a galloping inflation that many analysts warned would not be fleeting. But Putin’s war brings a black-letter confirmation: the prices will go up even more, at the same time, for bread, food in general, and energy. The bread becomes untouchable for millions of people hit by poverty as wheat exports from the Black Sea are literally blown up and the global prices rise. The UN food price index reached an all-time high in February, breaking the previous record of 2011. There are two reasons why the war is raising the price of bread. The first is the supply. Russia and Ukraine together usually exported about 30% of the world’s wheat, and now the grain exports from the two markets are blocked. The second factor is the energy: the agricultural equipment needs fuel to operate, and the manufacture of fertilizers is energy consuming. Russia is also a major producer of fertilizers. The sanctions imposed on Russian oil and gas make the energy extremely expensive and the chemical fertilizers hard to find. As gas and oil prices rise everywhere as a result of the war, this also affects the agriculture.

The rise in the price of bread will be felt unevenly in the world, the most affected being obviously the poorest countries, which will become even hungrier. The World Economic Forum warns that the price of bread in Egypt rises hastily, as the country imports more than 80% of its wheat from Russia and Ukraine. One-third of the population of Egypt lives below the official poverty line and relies on state-subsidized bread. In Iraq, there have already been protests over food prices. Hungary banned the grain exports on March 4 for food security reasons. In the UK, the consumers were warned that the food prices would rise by up to 15% this year. Even in the United States, Putin’s war led to a 40% increase in the reference wheat prices on the Chicago Stock Exchange. And the World Bank warns that the rising food prices could trigger social unrest in North Africa and Middle East.

Paolo Gentiloni, European Commissioner for Economy, emphasized during his visit to Bucharest that it is still too early to estimate the impact of the war on the European economy. “It is clear that the 4% economic growth that we forecast in January, or 4.2% for Romania, will have to be revised downwards,” Gentiloni said. On the other hand, also

independent analysts see a growing inflationary threat. CFA Romania analysts have revised down their economic growth estimates from 4.3% to 3.5%, and expressed concerns about the growth rate of the inflation over the next twelve months.

In Romania, the food prices rose by 8.84% in February 2022, according to INS data. The oil became more expensive by almost 26%, the same for potatoes, and the price of flour and corn rose by more than 14%. The bread is already 11% more expensive, and with it we swallow the indirect cost of the war of Putin.

Daniel Apostol

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