Russia’s sanctions on Europe (already taken, in silence) and the “tsunami” on the prices of bread and pasta

While the US and Europe are trying to finalize a package of sanctions against Russia on the question of Ukraine, Moscow has already acted: first of all by banning the export of nitrogen fertilizers. A move with heavy repercussions: here they are

While the White House and European governments tried painfully to imagine possible sanctions on Russia if he invaded Ukraine, Vladimir Putin took action.

We’ll see this in the next wave of hikes on staple food: durum wheat flour, bread, pasta.

on these assets that the strategy of economic destabilization by the Russian president is looming in the clearest way.

The analysis that will be presented today at a conference of agricultural consortia of Italy speaks of tsunami on the prices of wheat derivativesof which the moves of the Russian president are one of the recent factors destined to fuel it.

In particular a decision of the Kremlin represents a warning to the West, at the height of tensions over Ukraine: last February 2nd Moscow has banned the export of ammonium phosphate to the rest of the world for at least two months and other nitrogen fertilizers produced from methane, of which Russia is a global oligopoly.

The block by law will last at least until the beginning of April, in a decisive phase for the production cycle because the time is coming when fertilizers must be used in the fields.

And since they represent 20-25% of the cost of producing wheatthe recent surge in their prices (plus 220% from mid-November to today) will have cascading effects far beyond the increases observed to date.

Undoubtedly, there are strategic reasons behind Russia’s choice to ban exports. It arrives two days after the fire, for reasons yet to be explained, at Winston Weaver’s large nitrogen fertilizer plant in Winston-Salem, North Carolina.

After that plant closes, the impact of the Russian ban will be even more effective in to increase inflation in Europe and in the rest of the world.

Meanwhile the rest of the world will have to turn to Russia even more than before for its grain reserves.

Italy was also a buyer of Russian nitrogen fertilizers, bought through triangulations through Turkey and Egypt precisely to circumvent the very sanctions that the European Union has imposed on those products for years.

The effects will now be complex to manage, also because in recent months the Ferrara plant of the Swedish multinational Yara has announced production stoppages, precisely because of the increasingly high prices of natural gas.

Many causes naturally contribute to the rush of methane, fertilizer, wheat and pasta price lists. But really these increases have reinforced Putin’s blackmail power in pursuing his subtle strategy of economic destabilization of Europewhile amassing troops on the borders of Ukraine.

In January came the halving of natural gas supplies to Italy and other European countries (as documented by the Corriere), in February the block on fertilizers.

Moreover, it is the same high prices on global lists that make it possible for the Russian dictator to accept lower volumes of exports without suffering excessive repercussions on turnover.

When this crisis is over, Italy and Europe will have to decide to what extent wisely to continue to rely on a trading partner who has a clear political agenda: to destabilize its customerswhich it considers allies to be bent to its geopolitical priorities.

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