Ukraine war: Meat sector braces for renewed market volatility

Russia’s invasion of Ukraine has led to renewed market turbulence across the red meat supply chain, new analysis by Quality Meat Scotland (QMS) shows.

After two years of market volatility caused by the global Covid-19 pandemic, some may have hoped for a quieter 2022, characterised by greater certainty.

However, the start of the Ukraine war has led to renewed uncertainty, with the potential for even greater disruption than the pandemic, predicts Quality Meat Scotland (QMS) economist, Iain Macdonald.

“The current crisis has once again demonstrated the complexity of global supply chains and that a sustainable and secure food supply must remain a key consideration along the path to net zero,” he said.

With the Black Sea region being one of the world’s key arable crop exporting regions, the most obvious potential impact is on an already tight grain and oilseed market balance.

The closure of Ukraine’s ports and sanctions on Russia have the potential to further reduce the supply of crops into the world market towards the end of the current marketing year and into the next.

Meanwhile, the difficulty in planting and fertilising spring crops in Ukraine will constrain supply in the next marketing year, Mr Macdonald said.

“Unsurprisingly, futures markets have seen prices surge beyond already high levels. In London, May delivery contracts have risen by a third since the start of the final week in February, while November 2022 and May 2023 contracts have seen increases of around 20%.