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Crises extend to bread and currency: Ukraine's war may exhaust Iraq's budget by two billion dollars
February 28, 2022
There is a serious [You must be registered and logged in to see this link.] about the crisis that Iraq may be exposed to in the field of some food commodities due to [You must be registered and logged in to see this link.] .
The rise in wheat prices will cause Iraq to resort to imports, and the prices of bread and bread will rise in bakeries and bakeries as a result of its dependence on imported flour.
Wheat tops the food commodities that Iraq may be affected by the Ukrainian crisis, as the world is expected to witness a major wheat crisis, due to supply disruptions or Russia being affected by US-European sanctions that prevent it from exporting wheat. Indeed, wheat prices have risen to the highest level in 9 years.
The rise in wheat prices will lead Iraq to resort to imports, and the rise will affect bread and bread in bakeries and bakeries as a result of its dependence on imported wheat.
The Ministry of Commerce had [You must be registered and logged in to see this link.] about "the stability of the prices of all foodstuffs in the local markets, with the exception of a slight increase in edible oil produced in Ukraine."
But the economic expert Salam Sumaisem believes that "the talk of officials in the Ministry of Trade aims to reassure the market in a desperate attempt to curb the rise in prices." At a time when "Iraq does not have a strategic stockpile" of the crop.
And the ministry [You must be registered and logged in to see this link.] in another statement that "it has storage and is looking forward to the crisis ending soon, and therefore what is available from a ration card secures several months," calling for "attention to the national product as well as Iraqi agriculture."
billion dollar import
And due to the lack of food security in Iraq and the rise in prices as "evidence", "Iraq is the most affected by the shortage of wheat due to the Ukraine crisis," according to Hassan Al-Tamimi, head of the Federation of Farmers' Associations.
The talk of officials in the Ministry of Commerce aims to reassure the market in a desperate attempt to curb the rise in prices
Iraq has reduced the cultivated areas under the current winter plan by 50%, which means that it needs to import more than two million tons of wheat, as Iraq consumes 4.5 million tons of wheat annually.
Reducing the cultivated areas will force Iraq to import two million tons of wheat in the accounts of Al-Tamimi, who said in a television interview followed by “Ultra Iraq” that “the imported ton of wheat amounts to 700 dollars in the final costs to Iraq,” regardless of the current crisis, as well as the exit of Hard currency.
As for the current crisis, the price of a ton has reached a thousand dollars, according to Al-Tamimi, which means that Iraq will pay two billion dollars to fill the shortage in wheat.
With the rise in the prices of "samon", which has become "6 thousand," according to the head of the Federation of Farmers' Societies, and the government's continued failure to pay the disguised money to the farmer by buying the wheat product from him at a rate of 560,000 dinars, "the farmers may not export their crops in this season" to the state, and it has begun "People buy wheat from markets and farmers."
This procedure, if it happens, will force the Iraqi state to import larger quantities than expected, as farmers will refrain from marketing their crops for the state because of the price given to them.
Iraq will have to pay two billion dollars to import wheat from abroad to fill the shortage at home
The head of the Union of Farmers' Societies, Hassan Al-Tamimi, criticizes the Ministry of Commerce's "double-doing" by paying cash for imported goods while repeatedly delaying farmers' dues.
Regarding the water crisis, he says that the solution to the problem "is very simple and is done by imposing the use of modern irrigation at 50% of the farmers."
And it is not only the Ukrainian crisis that threatens the Iraqi markets, but the political odds of a Chinese move on Taiwan that would “ignite” global markets.
Salam Sumaisem says in a television interview followed by "Ultra Iraq" that "the prices of oil, sugar and rice may ignite if the situation between China and Taiwan becomes tense," as the probabilities indicate, at a time when "officials refuse to appear in the media because they do not know what is going on."
Sumaisem asserts that "the devaluation of the dinar has destroyed every production base, whether in industry or agriculture," describing the white paper launched by the current Finance Minister, Ali Allawi, as "the worst scenario for economic reform."