Ukraine’s inflation rate stands at 16.1 percent, but has fluctuated by almost 25 percentage points in the last year. Inflation spiked because of a weak wheat harvest, global food competition, elevated energy costs and rising wages produced by rapid economic growth.
The government responded to the increases in food prices by restricting grain exports [PDF]. But the current food crisis in Ukraine — a country known as the breadbasket of Europe and the black-earth belt — presents challenges and opportunities. The cost of staple items like bread, eggs and vegetables increased by 20 to 70 percent.
High global prices and demand for grain result in reduced local supply, and therefore higher prices. Private investors are also lining up to buy and develop Ukrainian land, despite a legislative moratorium that prevents the sale of land.
Dave Marash reports from Kiev on Ukraine’s potential to open up land to private investors, feed the world and support its domestic economy.
10/10/2008 :: 01:04:43 PM
Francisco Says:
what I take away from this story is that international companies are exploiting the Ukraine: Illegally buying up land while mostly likely greasing politician’s pockets in order to secure their property once regulations change…. and what’s worse is that it’s not benefiting the locals. They have this great land for farming and it’s all being shipped off overseas. Food prices are going up there. I hope the people don’t stand for this. Maybe they could allow these big companies to come in but make it law that they have to keep a certain percentage of the crop in the local market.