Prices of agricultural raw materials imported from Russia, Ukraine climb

The shortage of supply from Russia and Ukraine has caused the prices of raw materials for global production, such as wheat and corn, to surge by 10-20 percent, and fertilizer prices to soar by more than 20 percent lately, negatively affecting livestock and crop production.

According to the Ministry of Agriculture and Rural Development (MARD), Vietnam currently imports many raw materials for domestic agricultural production from Russia and Ukraine. For instance, wheat accounts for about 20 percent of total wheat imports, with 1 million tons; corn accounts for 3 percent of total imports for animal feed production; fertilizers account for 10 percent of total fertilizer imports.

The lack of shipping lines and the increase in transportation costs make Vietnamese importers halt trading with Russia and switch to finding suppliers from other countries, such as Australia, South America, and South Africa. More importantly, the shortage of supply from Russia and Ukraine has caused the prices of raw materials for global production, such as wheat and corn, to surge by 10-20 percent, and fertilizer prices to soar by more than 20 percent lately, negatively affecting livestock and crop production.

Vietnam exports about US$500 million of agricultural, forestry, and fishery products to Russia every year. Of which, seafood exports are worth $164 million, accounting for 3 percent of total seafood exports; coffee worth $173 million, accounting for about 6 percent; black pepper and cashew worth $60 million, accounting for about 2 percent. When the war broke out, exports to Russia must all be halted due to banking risks, a shortage of shipping lines, and high costs. Enterprises now have to monitor the situation to handle inventory or find ways to export to other markets.

The MARD will work closely with the associations and the State Bank of Vietnam to support payments for businesses that have exported goods to Russia, but financial transactions are stagnant. Along with that, the ministry will work with raw material importing enterprises to discuss solutions to stabilize input prices for domestic agricultural production, attract enterprises to increase investment to be proactive in essential inputs for agricultural production, processing systems, and agricultural logistics. In addition, it will also seek solutions to diversify export markets, including markets that previously had a large volume of imports, such as the EU, China, and the Middle East.