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Agriculture ministry braces for higher wheat prices given recent global events

By Michelle Sutherland

The Ministry of Agriculture, Food Security, and Enterprise is bracing for a potential increase in the price of flour and wheat following Russia’s announcement that they were pulling out of the Black Sea Grain deal earlier this week.

Lennox Nicolson, controller of Supplies, told The Reporter on Thursday, “Any increases on the international market translate to increased price Belize faces when it imports wheat.

“Wheat prices may be driven by supply disruptions or increased logistics costs. This could potentially result in increased flour prices in Belize and increased costs for the production of bakery products. However, the extent and timing of any increases will depend on factors outside Belize, but we need to monitor the impact it may have on production costs of flour and bakery products.”

While Nicolson reminded us that it is still impossible to predict the exact impact or timing of the potential increase, he indicated that under the Supplies Controlled Act flour is a price-controlled item. This, he says, means that the price of flour will not change overnight since any changes will have to be made via a statutory instrument.

Furthermore, Nicolson said that the ministry is in communication with the mill and has access to import records for wheat. He said that they intend to evaluate the invoice and shipping costs for future wheat shipments. Those findings, including the impact that import costs have on the production costs of flour will be shared with Cabinet. The final decisions relating to control price will be deliberated based on those findings.

CEO Servulo Baiza of the Ministry of Agriculture, who is currently out of the country, told The Reporter on Thursday that while an increase in the price of flour is expected, the mill would have to make a case for an increase, if justified, then that proposed increased would need to be presented to Cabinet for approval.

Last year, the United Nations and Turkey brokered the Black Sea Grain deal between Russia and Ukraine to safely export Ukrainian grains across the Black Sea to developing nations. This was in an effort to drive world food prices down which at the time had spiked due to the ongoing war.

With this latest development, Ukraine will now have to reroute exports through its land borders and small ports leading to an increased cost and a reduction in farmers’ profit. This, according to experts, could lead farmers to plant even less next season, therefore, placing further pressure on supplies going forward.

Reports say that while the Turkish and Russian Foreign Ministers are expected to meet on Monday to further discussions, this is not the first time that Russia has withdrawn from the Black Sea deal.

Russia’s withdrawal stems from their claim that Western sanctions were holding up parallel agreements to allow payments, insurance, and shipping for Moscow’s own agricultural products. Russian spokesperson indicated they would only resume participation once the relevant agreements were fulfilled.

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