Wheat Prices Could Soar if EU Approves Ukraine Loan

Business | March 7, 2014, Friday // 12:27
Bulgaria: Wheat Prices Could Soar if EU Approves Ukraine Loan Photo by BGNES

Ukraine's wheat production, which is the 11th largest in the world, may suffer due to the EUR 11 B aid from the EU.

The reason is that the money will come with strings attached, such as drastically raising electricity and fuel prices in the country, as Bulgarian website Expert.bg has warned.

Another requirement will be to scrap the ban on land sales to foreigners, according to Bulgarian analyst Simeon Elazarov from the Sofia Stock Exchange. This will lead to wheat's prime cost going up and, therefore, increase its added value.

Eleazarov believes that, on the other hand, the developments in Ukraine might have a positive role for Bulgaria's wheat exporters, who are rivaled mainly by Ukrainian producers.

Wheat, like other commodities, is mostly transported by sea, and traders will stop at whichever port city offers the best prices.

Experts think that if Ukraine signs an agreement with EU and the IMF over the loan, all goods made by the country will inevitably become more expensive, thus benefiting Bulgarian ports.

Estimates quoted by British newspaper The Guardian show that the global price for wheat has already increased by 5.9% to USD 6.38 a bushel in response to the crisis shaking the country.

The same goes for corn, which on Monday rose up by 3.7% to USD 4.81.

This could be partially explained with farmers holding back grain as a protection against the falling currency.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!

Business » Be a reporter: Write and send your article
Tags: wheat, Ukraine, EU, IMF, loan, Sofia Stock Exchange
Expats.bg All Are Welcome! Join Now!
Bulgaria news Novinite.com (Sofia News Agency - www.sofianewsagency.com) is unique with being a real time news provider in English that informs its readers about the latest Bulgarian news. The editorial staff also publishes a daily online newspaper "Sofia Morning News." Novinite.com (Sofia News Agency - www.sofianewsagency.com) and Sofia Morning News publish the latest economic, political and cultural news that take place in Bulgaria. Foreign media analysis on Bulgaria and World News in Brief are also part of the web site and the online newspaper. News Bulgaria