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Effects of war could be felt

Effects of war could be felt

The effects of the war in Ukraine could soon be felt in Mid Canterbury.

International grain prices have jumped this week, it's expected the hostilities in Europe will affect local wheat prices again.

A wartime agreement that allows grain to flow from Ukraine was not renewed on Monday, removing the protection of Ukraine's ports from Russia.

On Thursday Russia hit Ukrainian's grain export terminals and grain storage facilities on the Black Sea.

Sim's Bakery in Ashburton was affected by wheat price increases when the war in Ukraine started.

Managing director Glenn Ross said he expected prices would go up again.

"We're buying all NZ-made flour but even that's got to get a knock-on effect."

Ross said he had not been advised of a price increase as yet but he expected it would trickle through when supplies were affected and prices rose.

"Being a local business we do want to buy locally."

However, Ross said if local prices increased too much they would need to consider imported options.

Rabobank senior grains analyst Dennis Voznesenski said the latest price spike followed “a barrage of missile attacks on Ukrainian grain port infrastructure".

Russia had announced that vessels travelling to Ukraine’s Black Sea ports would be considered involved in the Ukrainian conflict on the side of the Kiev regime – dashing hopes of external entities protecting Ukrainian vessels, Voznesenski said.

The rise in international prices would have a direct impact on local New Zealand wheat import prices.

"In the long term, it means more grain stockpiled in Ukraine, which leads to lower Ukrainian prices, lower Ukrainian farm margins and lower planting,” Voznesenski said.

By Sharon Davis