Fears for food security in Albania as final Russian grain ship arrives

Fears for food security in Albania as final Russian grain ship arrives
The Albanian port of Durres. / Clare Nuttall
By bne IntelliNews March 1, 2022

Sailing under the Russian flag, the Slavianka arrived at the Albanian port of Durres on February 28, carrying what is expected to be the final shipload of Russian grain until the current crisis eases. 

Albania, a Nato member, was quick to condemn the Russian invasion of Ukraine and join western sanctions on Russia. However, after months of rising food prices, there are fears in the country about further price hikes and potential shortages as a consequence of the war in Ukraine. 

According to local media reports, the Slavianka left Russia 13 days before it docked at Durres on February 28. That was more than a week before Russia shocked the world by invading Ukraine, bringing down a barrage of tough sanctions from the EU, the US and other western nations. 

It was carrying 3,030 tonnes of bulk grain, which according to Monitor.al is around 1% of the grain imported to Albania last year. Data from statistics office Instat shows that 46% of Albania’s grain imports in 2021 were from Russia, and a further 4% from Ukraine. 

The two countries are the world’s two top grain producers. However, as bne IntelliNews has reported, following Russia’s attack on Ukraine on February 24 this year’s Ukrainian harvest is in danger and its Black Sea and Sea of Azov ports have already been closed. The threat to supply has already caused prices for wheat in the global grain market to soar to decade-long highs. 

This comes on top of food price inflation in Albania since mid-2021, pushed up mainly by higher energy prices as the world recovered from the coronacrisis. 

Headline inflation accelerated throughout 2021 from 0.4% year on year in January to 3.7% y/y in December, driven by both internal and external factors. The latest data from Instat shows inflation remained steady at 3.7% y/y in January 2022. 

Food prices kept the overall price index under pressure, rising another 3.6% in January after the 2.4% leap in December. In annual terms, food prices increased by 7.2% y/y as of January, accelerating from the 6.8% y/y rise in December.

Hikes in the cost of fuel, fertilisers and other inputs sparked protests from farmers in Albania at the end of last year, as well as from ordinary citizens concerned about their energy bills. 

The leader of Albania’s opposition Democratic Party has urged the government to take measures to ensure the country has sufficient food reserves as well as easing the financial burden of an expected hike in food prices. 

“In a situation of expected price increases as a result of Russian aggression against Ukraine, the difficulties of Albanian families will deepen even more,” said Democratic Party leader Lulzim Basha on March 1, a party statement stated. 

“Therefore the government should immediately have a plan of measures in place to ensure the provision of sufficient food reserves, as well as to determine the ways to help families in need.” Specifically, the party called for the reduction of VAT for foods in the basic consumer basket to be slashes from 20 to 6%. 

Elsewhere in Southeast Europe, states such as Serbia already capped prices for basic food goods in the autumn as prices rose. More recently, Moldova took steps to ensure food security and prevent price hikes following the invasion, as Ukraine and Russia are its two top sources of food imports.