AZE.US
Drought, extreme heat and ongoing military conflicts are creating new risks for the global wheat market, potentially affecting flour and bread prices in Azerbaijan.
As AZE.US reports, economist Eyyub Karimli said climate change, drought in major producing countries and geopolitical tensions could reduce wheat production and exports, pushing global prices higher.
The developments are particularly important for Azerbaijan because a significant share of the country’s wheat demand is covered by imports.
However, Karimli said higher global wheat prices would not automatically lead to an immediate or proportional increase in domestic flour and bread prices. Existing grain reserves, the stable exchange rate of the manat and government market-regulation measures could temporarily soften the impact.
If global prices remain elevated for an extended period, however, the cost of imported wheat will increase. Flour producers would likely face pressure first, with the effects potentially spreading to bread and other flour-based products.
“Under current conditions, it would be wrong to regard a sharp increase in bread prices in Azerbaijan as inevitable. However, the risks will rise if drought, lower crop yields and logistical problems in the Black Sea region intensify simultaneously,” Karimli said.
The economist stressed the importance of maintaining strategic grain reserves, diversifying import sources and expanding Azerbaijan’s domestic production of food-grade wheat.
AZE.US