Kuwait, (Business News Report)|| Kuwait has begun to hedge against an upcoming global wheat crisis, due to geopolitical tensions, against the backdrop of the Russian-Ukrainian crisis.
The Russian and Ukrainian market accounts for a large share of wheat imports around the world, and the outbreak of war will lead to a global wheat crisis.
Kuwaiti sources stated that the government is working on diversifying wheat import sources among the mechanisms adopted by the government to secure its strategic reserves, in addition to securing supply chains away from the current areas of tension.
The sources indicated that diversifying the markets primarily targets the search for the best prices and international quality.
The focus on rationalizing the consumption of bread is among the mechanisms that the government aims to educate citizens and residents about in the event of a military confrontation, the sources said.
It is expected that any escalation in Ukraine and Russia will jeopardize food security in the Middle East and North Africa region.
In a related context, wheat prices recorded their biggest weekly increase since last November, due to the continuing tensions between Russia and Ukraine.
Investors are increasingly concerned about the possibility of a disruption to grain exports from the two major exporters.
Tensions between Russia and Ukraine are going through a crucial week, which increases fears as the West and America warn of the consequences of the Russian invasion.
President Vladimir Putin also accuses America of failing to achieve his demands. Russia has several times denied planning an invasion against its neighbor, and diplomatic efforts to find a solution to the situation are still continuing.
The prices of wheat futures contracts in the Chicago Stock Exchange rose by 1.7%, after achieving gains during the past week, which amounted to 5.3%.
Cereal prices are still about 7% below their peak level last November, when prices reached their highest level since 2012.
The shipments flowing through the Black Sea region are important to ensuring the security of grain supplies at the global level.
Russia and Ukraine account for up to a third of wheat and barley exports, as well as about a fifth of the corn trade.
Continued turmoil in the region could leave commodity prices rising and increase food costs, which are already at their highest levels in a decade.