Observers of global grain markets will be familiar with the “Great Grain Robbery” of 1972. This was not a robbery in the traditional sense. Rather, it was a period when the US sold large volumes of grains to the former Soviet Union at subsidised prices, not realising there would soon be a poor grain harvest across several major grain-producing countries.
In addition, there was a rise in demand for grains from the global livestock industry, as well as US farm policies at the time that discouraged the expansion of soya bean production, a key input for the livestock industry (in the place of maize).
Among other factors, the realisation of the crop failures across the world and volume of grain the US had shipped to the former Soviet Union, led to a spike in US and global agricultural commodity prices. By this time the Soviets had managed to secure sufficient supplies for their domestic needs and were thus largely insulated from the global grain shortage. Wandile Sihlobo discusses the impact of the Russia-Ukraine war in the linked article, first published in Business Day.
Wandile Sihlobo is the chief economist of the Agricultural Business Chamber of SA (Agbiz)
Author: Derrick Markotter
RCCI Webmaster Derrick runs a boutique web marketing agency, IdealMedia Marketing.