Keeping stomachs full key to settling Ukraine conflict
Published 13/03/2014 | 02:30
Should Ireland be cosying up to Russia more in the current stand-off with the Ukraine? While the most common narrative here is that Russia is the bad guy bullying its former bell-boy, Irish commercial interests are probably singing a different tune.
Agri-consultant Brendan Dunleavy has lived and advised in both Russia and the Ukraine at various times over the last 20 years. The Meathman was not surprised to see Russia back off from a full-scale military engagement, even if it is still sabre-rattling down in the Crimea.
"President Putin knows that he can't afford to risk upsetting food supplies for the 142 million Russian population," says Mr Dunleavy.
"The Ukraine is not known as the breadbasket of Europe by accident. It is the world's third largest exporter of corn and the sixth largest of wheat, with a significant proportion of this heading for the vast Russian market."
He maintains that the memories of the early 1990s food shortage that was only alleviated by US food-aid still sting in the Russian electorate's memory.
The military posturing over Crimea has already injected uncertainty into food commodity pricing. Bloomberg reported this week that the grain markets saw their biggest increase in two years over the last two weeks.
Markets hate uncertainty, but the spike is also a function of the practicalities of trying to trade in a region on the brink of conflict. Russian warships are clogging up Black Sea ports and investors are piling into commodities such as grains to hedge against falling share prices on the Russian stock market and a devaluing Russian Rouble and Ukrainian Hryvnia.
Of course, any increase in world grain market prices is welcome news for Irish tillage farmers, who've seen grain prices fall by 20pc in the last 12 months.