Another looming cloud on the horizon is the increasing tension at the Ukraine/Russia border. The threat of war hangs over the region and both countries also happen to be key exporters of grain and ammonium nitrate which is used in production of fertilisers. Ukraine and Russia account for 30% of the world’s wheat exports. The eastern regions of Ukraine such as Kharkiv are the main wheat producing regions of the country so if Russia does invade from the east these areas will be first to come under their control.

The EU, UK & US are threatening severe sanctions against Russia if they invade Ukraine but the downside to this is Russia is the dominant supplier of gas to Europe. Russia could retaliate by driving up the price of oil further still. As the price of oil usually tracks all other commodities including dairy a perfect storm could occur where gas, wheat and ammonium nitrate prices are driven up so increasing global food prices massively. According to the Washington Post ‘The impact on global consumers could be far worse should the Russians seek to take steps- including higher export tariffs- to corral their own wheat production to ensure food security during any prospective war’.