Supermarkets call for calm and rule out short-term shortages due to the war in Ukraine | Economy

The war in Ukraine is causing tensions in the Spanish food chain: from the field to the supermarket passing through the factories. The sector closely monitors the conflict and the problems it can cause. And that, despite the fact that, at the moment, there are no supply problems. Supermarkets assure that there is no lack stock and that the situation is under control. However, in the field and in the industry of certain products there is uncertainty due to the fear that sunflower oil and certain cereals will be scarce. This circumstance has caused a double fear among customers: that prices will rise and that there will end up being shortages, which explains why there are some anomalous purchases that cause the shelves with these products to empty quickly in some cases and messages are sent alarmists on social media. “We don’t use it much, but we have bought sunflower oil for prevention against the war and for the transporters’ strike next week,” explains a married couple in quarantine as they leave a Mercadona in Madrid.

In the last two years, some of the most apocalyptic scenarios only within reach of the cinema have been coming true. The pandemic was an unexpected setback throughout Europe, where there was a certain hysteria that was reflected in the frantic purchase of toilet paper. Now, faced with a war in European territory, something that has not happened for more than two decades, the fear of the food industry is that senseless purchases will occur again. The first focus has been on sunflower oil, and the next may be sweets, industrial pastries or preserves. Although the sector tries to calm the waters: “The only product that has been limited is sunflower oil and not because there is a shortage, but to order its sale in the face of atypical demand by consumers, many of them catering companies” , assures Ignacio García Magarzo, CEO of Asedas (association that brings together Mercadona, Salvamas, Lidl and Dia, among others).

In the supermarkets, meanwhile, there is tranquility. The arrival of customers is the usual and their purchases are similar to any other day, according to the distributors. Of course, there are products that now have a preferential place in more shopping carts than a few weeks ago. Despite this, they all rule out having supply problems. In the case of Dia, he calculates that he has saved for a period of at least three or four months, according to what his CEO, Ricardo Álvarez, indicated on Thursday. The company trusts that, after this time, “the market will be rebalanced”.

The conflict affects various raw materials and sunflower oil that comes from Ukraine, where commercial ports have been closed since February 24 and there is much uncertainty about the maintenance of crops. This also has consequences on the primary sector that uses this material for the production of other products. For example, sweets and industrial pastries, as well as canning. In fact, the main associations of these sectors warn: they only have reservations to maintain their activity for the next four weeks in the best of cases and are already looking for alternatives with other oils of vegetable origin such as palm, rapeseed or coconut. Although this change will not be free and logic says that there will be an increase in the cost of the final product.

Sources from the Federation of Food and Beverage Industries (FIAB) point out that the effects of the war are also causing concern due to the strong “pressure of energy costs on companies” and the “difficulties in importing certain raw materials” used in industry. “This is the case of sunflower oil, corn and wheat, ingredients used for products such as flour, pasta, semolina, snack products, bakery products, pastries and pastries, as well as for animal feed, among others,” they say. .

For his part, Aurelio del Pino, president of the ACES association, which represents Auchan Retail, Carrefour, Eroski and Supercor, warns that “Ukraine is a very important supplier of many agricultural materials, especially corn and sunflower, and the current situation has begun to generate distortions and tensions in the primary markets that could have effects in the medium term”. The tensions mentioned by Del Pino affect, for example, the agricultural and livestock sector.

He knows in depth all the sides of the coin.


Animal feed shortage

In this regard, the Minister of Agriculture, Fisheries and Food, Luis Planas, insisted this Friday in an interview on TVE that the food supply in Spain “is assured” despite the problems caused by the war in Ukraine. Planas has pointed out that the sector has a very strong autonomy and a high level of exports. However, he has admitted that there are “bottlenecks” to resolve, but has called for calm in the face of nervousness about the supply of oil and has stressed that in Spain there are “sufficient supply possibilities” of vegetable fats, with the alternative of olive oil.

The livestock sector is the one that most fears the scarcity of cereals that are used in the production of feed for the livestock herd. Among those imported from Ukraine, corn stands out: it is the second supplier of this product to Spain, only behind Brazil, with an average volume per season of 2.7 million tons, 22% of purchases in the Foreign. Specifically, in 2021 Spain acquired Ukrainian corn for 510 million euros.

For this reason, after the interruption of the Ukrainian market, the Government has asked the European Commission to relax the community requirements when it comes to importing cereals, albeit temporarily, and thus offset the loss of the Ukrainian harvest. In addition, this problem will last over time, since there are many doubts about whether they will be able to carry out the seeding of the next campaign in the current war situation. What the Executive is requesting is to make the sanitary requirements for imports in Europe more flexible in order to be able to buy from countries with sufficient supply such as Argentina and the United States, as requested by the sector. And that the fallow areas required by the CAP be reduced so that these lands can be temporarily planted during the conflict.

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