(Yicai Global) Feb. 28 -- Chinese pig breeders and other animal husbandry firms will probably be squeezed further as the conflict between Russia and Ukraine, both major producers of corn and wheat, is only likely to push the price of grains used in animal fodder, already at a 10-year high, up even more at a time when they are struggling to pass the increased costs onto the consumer.

The Russia-Ukraine conflict could do great damage to the two countries’ agricultural zones, raise food inflation globally and hike China’s import costs of some grain varieties, according to CITIC Futures’ team of agricultural products. China is the biggest importer of Ukrainian sunflower oil and the second largest buyer of its corn.

The crisis in Russia and Ukraine will greatly impact the planting and production of wheat and corn, Everbright Securities said in a research report. Countries were already paying greater attention to food security as a result of Covid-19 and the price of grains worldwide are on the rise.

The price of wheat, corn and soybean futures have jumped 31 percent, 32 percent and 20 percent since the beginning of this year to a five-year high, according to the Chicago Board of Trade.

Over 30 Chinese fodder producers have announced since the middle of this month that they will hike the price of pig feed by between CNY50 (USD7.92) and CNY300 a ton. Yet a glut in pork supply means that the price of the fresh meat is falling. Pork was selling at CNY18.96 (USD3) per kilogram on Feb. 23, down 15 percent from two weeks ago, according to the Ministry of Agriculture and Rural Affairs.

As a result, revenue is shrinking. Six out of the seven major hog breeders to have released their sales data for last month so far have logged a drop in earnings. Zhengbang Tech posted a 60.9 percent plunge in revenue in January from a year earlier, and a 5.5 percent drop from the month before, to CNY1.2 billion (USD190.1 million).

Editor: Kim Taylor