Global bakery and cereal sector to see future turbulence as wheat prices hit record highs, says GlobalData.
The Ukraine-Russia conflict is expected to impact food sectors such as bakery and cereals severely in the coming months, notes GlobalData. The leading data and analytics company explains that prior to the conflict, the global bakery and cereal sector was forecast to grow from $625.8 billion in 2020 to $792.9 billion in 2025, representing an overall gain of $167.1 billion over the five-year period. However, given Russia and Ukraine’s positions as major grain producers, this conflict presents a major disruption to global supply and the sector’s growth.
Amira Freyer-Elgendy, Food & Drink Associate Analyst at GlobalData, comments: “Ukraine is a producer of wheat, maize, barley, rye, potatoes, and buckwheat and together with Russia, it supplies a sizeable chunk of the global wheat market. China, Italy and Spain – which are key markets for the global bakery and cereal – are some of the country’s top export destinations and so the global landscape of the segment may dramatically shift. Regions in MENA will be especially hard hit and are likely feel the impact of price rises the most.”
The categories that these price hikes will affect the most are morning goods, bread and rolls, and dough products, such as pizza bases and pastry shells, both in foodservice and retail.
Freyer-Elgendy concludes: “The timing is unfortunate, coming off the back of the pandemic-fuelled supply chain issues, poor wheat harvests in Russia and price hikes. With COVID-19 and the Russian conflict causing key issues for international shipments, a push for local products is expected.”