‘Unprecedented’ challenges ahead

Speaking at this year’s NIGTA annual dinner he said that Russia’s war in Ukraine has sent shockwaves through global markets, inducing unprecedented volatility and leading to very challenging trading conditions.

O’Donnell added:“Ukraine is one of the world’s largest exporters of grains, and taken together, Russia and Ukraine account for nearly 30% of global wheat exports.

“Ukraine is also a major supplier of maize to the European market and the Black Sea is an important trading route for agricultural commodities to Northern Ireland.

According to the NIGTA representative, Ukrainian port operations have been suspended, and with sanctions imposed on Russia, world trade is suffering major disruption as supply chains try to rebalance in response to altered supply and increased demand. 

He continued:“The impact of the war in Ukraine is also being felt in the energy, fertiliser and freight markets. Energy costs had already skyrocketed in recent months and will continue to be high for the foreseeable future as Europe attempts to wean itself off its dependence on Russian energy.

“Last year, fertiliser production was halted because the high energy prices meant it was no longer viable to produce.

“This had already caused supply shortages and will be further exacerbated by restrictions on Russia, which is a major fertiliser supplier.

“The global freight market is also under pressure, having experienced a year of rapid growth due to increased economic activity post-lockdown, it is facing higher fuel costs, and now more recently, sanctions applied to Russian vessels has tightened the shipping supply pool even further.”

O’Donnell also pointed out that these issues are not going to be short-term in nature. Input costs have been a challenge since the Covid-19 pandemic began. There will also be a legacy of disruption even after the war in Ukraine is over due to the damage to infrastructure which will take time to rebuild.

O’Donnell added:“In response to the crisis in Ukraine, NIGTA has engaged directly with the minister of agriculture and his officials in highlighting the impacts to the local feed industry and farmers.

“NIGTA has also made various representations via other Feed Trade organisations to the UK government and the EU.

“Securing the supply of feed raw materials is the priority and we are looking for urgent action on flexibility with maximum residue limits and GM approvals to broaden the access to alternative supply sources in other countries.”

NIGTA has also highlighted the need at farm level for ongoing support packages to help and alleviate some of the financial pressures of the spiralling input costs.

Turning to Brexit, O’Donnell specifically referenced the Northern Ireland Protocol.

He said:“While it is not perfect, in most areas it is working and allowing unique, unfettered market access for Northern Irish companies to sell products into GB and EU single market.

“Importantly the Protocol allows for the continuation of the just-in-time supply chains.

“However, on the broader front we have concerns where the UK government appears to be negotiating post Brexit Trade Agreements with countries, and not robustly requiring those countries to operate to the same food production and environmental standards as those expected of farmers and food processors in the UK.”