Chief economist of the International Monetary Fund (IMF) Pierre-Olivier Gourinchas said that the end of the Black Sea deal may lead to an increase in grain prices in the amount of 10-15%. This is reported by TASS.
Pierre-Olivier Gourinchas said that the end of the Black Sea deal could lead to an increase in grain prices in the amount of 10-15%. He specifies that during the term of the grain deal about 33 million tonnes of grain from Ukraine were exported.
“This helped to keep the pressure on food and grain prices lower,” he noted.
The expert believes that “now, since the grain deal has been suspended, the same mechanics are working in the opposite direction.” He elaborates that this is likely to put upward pressure on food commodity prices.
“This is likely to put pressure leading to higher food prices. We have some estimates in terms of how much supply will be reduced by, what the price elasticity is in view of that reduction and demand. We are still assessing where we will land. However, we think a grain price increase in the range of 10-15 per cent is a reasonable estimate, although we still have to see exactly how things will unfold,” Gurinsha summarised.
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