Food Supply Fears Are Growing as Romania Bans Grain Exports

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Romania became the first country to cut off grain exports during the coronavirus pandemic, a dramatic move that could fan worries about the global food supply.

The government passed a decree banning the sale of grain to countries outside the European Union during a state of emergency, which is expected to last until at least mid-May.

“We can’t afford to be left without wheat because of the greed of some grain owners,” Prime Minister Ludovic Orban said in a televised address on Thursday. “If necessary, I’m determined to ban these exports and even seize them.”

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However, the move is largely symbolic. Romania, the second-biggest wheat shipper in the European Union, has already harvested and sold much of its crop at this time of the season. Less than 1% of EU exports would be affected, according to estimates from agriculture advisory UkrAgroConsult.

The decision is still another sign that the world’s major food producers are fearful about their own supply as shoppers hoard cupboard staples and the virus snarls key trading routes. It’ll also revive memories of past export bans that caused chaos and soaring food prices.

“This is a manifestation of the new trend: food protectionism,” said Sergey Feofilov, director general at agriculture consultancy UkrAgroConsult in Kyiv. “This confirms that concerns exist about supply.”

Romania’s decision could also support higher wheat prices. Futures traded in Chicago, the global benchmark, are up 12% from a low in mid-March.

The United Nations has warned that countries should avoid “beggar-thy-neighbor policies.” A recent report estimated the number of people suffering from hunger could double in a few months because of job losses and labor disruptions related to the pandemic.

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Even though Russia and Kazakstan have already imposed limits, they left the rules loose enough so that plenty of grain is still flowing.

Romania will allow grain to be sold within the European Union, but will require paperwork that it’s not intended for export, the government said. The country has already shipped more than 90% of the wheat expected to go outside the EU in the season that began in July, according to government data and UkrAgroConsult.

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Romania is a key part of the Black Sea breadbasket, where the rich, dark soils are perfect for growing wheat. Cargoes of grains are regularly sold to desert countries in North Africa and the Middle East, and baked into the daily bread that feeds millions.

Romania is one of the biggest sellers to Egypt, the world’s top buyer of wheat. It also supplies Jordan, South Korea and Sudan. It’s also the EU’s biggest corn exporter and a large barley supplier.’

Bread costs have a long history of kick-starting unrest and political instability. During the food price spikes of 2008 and 2011, there were food riots in more than 30 nations across Africa, Asia and the Middle East.

— With assistance by Andra Timu

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