Friday, June 3, 2022

Supply Lines: Ukraine grain scramble

From countries scouring the maps for new routes to get grain out of Ukraine to Malaysia halting exports of live chickens, here's a snapshot

From countries scouring the maps for new routes to get grain out of Ukraine to Malaysia halting exports of live chickens, here's a snapshot of the latest key food stories from around the world:

Elusive Grains

European leaders are desperately trying to figure out how to get grain out of Ukraine. The labyrinthine challenge has politicians looking at everything from naval escorts to shifting whatever's possible overland to the Baltic. Officials and companies interviewed across the region say they are scouring maps for solutions like diverting road transport and reviving rail links.

The task is complicated by a dearth of truck drivers and the fact that the Soviets used a wider track gauge than the European standard. Ports in Romania and Poland, meanwhile, are backed up with traffic or at capacity. Trade officials warn that bottlenecks will get worse as the rest of Europe starts harvesting its wheat next month.

Full Story: Race Against Food Inflation Starts on Rusty Soviet Rail Tracks

Meat Disruptions

Malaysia said it was halting exports of chicken, in a major blow to Singapore, which imports about a third of its supply from its neighbor. The ban's the latest in a series of government measures aimed at easing domestic prices as nations around the world battle rising food costs. 

Earlier this week, surging meat costs in the US pointed to a disappointing start to the summer grilling season, which unofficially started on the US Memorial Day holiday Monday. With costs for ground beef and chicken breasts at all-time highs, consumers have few alternatives to switch to different proteins -- so some may skip them entirely. 

Full Story: Malaysia Reaffirms Live Chicken Export Ban in Blow to Singapore

More Food for Thought

With inflation vexing the global economy and potential food shortages looming, the outlook for crops across the globe is under intense scrutiny. The biggest question remains whether Ukraine grain will continue to be blocked from flowing out of the Black Sea. Signals from Russia earlier this week stoked optimism that exports may resume soon, yet lack of details is raising doubts.

Ukrainian Foreign Ministry spokesman Oleh Nikolenko said on Facebook earlier that for grain shipments to be freed, Russia should withdraw its navy from waters near Ukraine and provide guarantees that ports and commercial vessels will not be attacked.

Read More: Russia's Oil and Gas Bonanza Is Funding Putin's War

Lydia Mulvany in Chicago

Charted Territory

Turkey Shortages | Bird flu is curbing turkey supplies in the US just as burger season revs up. Starting in the third quarter, there will be "large supply gaps" for Jennie-O branded turkey products, parent company Hormel Foods warned Thursday. The shortages anticipated in the coming months come as one of the worst-ever avian influenza outbreaks wipes out flocks across the US Midwest. (Click here for the full story.)

Today's Must Reads

  • Rice watch | With the world facing mounting food insecurity because of shortages and soaring costs, governments will be watching rice prices for any sign that political unrest is about to erupt.
  • Aid for Africa | The European Union is considering a proposal to channel about 500 million euros to Africa to help tackle the continent's food crisis as the Russian invasion of Ukraine cuts off vital supplies, according to people familiar with the matter.
  • Fresh concern | UK consumers are being urged to brace for inflation getting worse before it gets better as soaring costs force retailers to keep raising prices, according to the British Retail Consortium, which said fresh food prices are now rising at their fastest pace in decade.
  • More storage | The Biden Administration announced $2.1 billion in new funding to bolster food supply chains, including initiatives to expand small- and mid-sized processing plants, according to a US Department of Agriculture official.
  • Playing favorites | Inflation accelerated at the fastest pace in five years in Uganda, partly driven by a steep increase in the cost a foodstuff the president recommended as an alternative to bread.
  • Bean counting | Ivory Coast and Ghana, the top two cocoa growers, are stepping up efforts to pressure the global chocolate industry into paying more to help support poor farmers.
  • Planting season | The forecast of a normal monsoon in India is poised to encourage farmers to expand plantings of major crops, a welcome development as the government grapples with rising food prices.

On the Bloomberg Terminal

  • Hormel hurdles | Hormel is transforming into a value-added, brand-centric company via M&A, innovation and optimizing operations, which will help the company achieve its long-term growth potential.
  • Soup sales| Campbell Soup's sales performance for the rest of the year may improve on easier year-ago comparisons, amid recovering food-service business and price increases.
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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