Malta’s biggest importer of grains has warned of the possibility that other countries will start to restrict exports and has called for a national strategy on the importation of wheat, as war in Ukraine chokes global supplies.

“So far, we know that Hungary has decided to stop all exports of wheat,” said Marco Cachia, the chief executive of Federated Mills, which supplies milled flour to around three quarters of Maltese manufacturers.

“We are also hearing that other countries may follow suit. If this happens, we could have a problem,” he said.

While he stressed the problem is not imminent, he said it may affect the supply of products on the local market in the long run so the country needs a strategy on the importation of wheat.

“If we’re not careful, we could end up having to limit supply locally,” Cachia said.

He said his company had “adequate stock” but the situation would get worse if the conflict persisted, adding they were in touch with the local authorities over the situation.

Countries mull restrictions

Hungary is a regular supplier of Federated Mills. But other countries from where it buys wheat, including Poland, Romania and Bulgaria, may be mulling similar action to hoard grain as supplies from Russia and Ukraine – which together account for 12 per cent of the world’s supply – dry up.

Importation from Russia is now difficult given the economic measures being taken against the country.

Ukraine has already set export restrictions on the crop and other agricultural products amid Russia’s military invasion but Federated Mills never purchases Ukrainian wheat because it lacks standards certification, Cachia said.

The war is already pushing wheat prices higher, with some shipments increasing considerably in price.

He reckons a strategy is needed because the increases were likely to be high and they would be reflected in the final price for the consumer.

Nationalist Party spokesperson Peter Agius was the first to flag the Hungarian wheat export restrictions to Times of Malta.

Peter Agius

On Monday he wrote to two European Commissioners – Thierry Breton, for the internal market, and Janusz Wojciechowski, for agriculture – drawing their attention to restrictions imposed by other EU countries.

Agius said that the imposition of these restrictions was in breach of the provisions on free movement of goods in the treaties of the European Union.

Agius highlighted the fact that Malta has no local cereal, grain or wheat production. So it depends on European free movement for its supply and for the production of bread and bread products as well as grain and feed for the agriculture industry.

He called on the commissioners to intervene and investigate the matter as well as take all precautionary measures to ensure the proper functioning of the internal market.

Foreign Minister Evarist Bartolo told Times of Malta on Monday that he was not aware of such restrictions but added that these did not surprise him.

He said similar restrictions had been imposed by various countries when the pandemic broke out, leading other countries restricting exports on a variety of products, including medicines, face masks and PPE clothing, among others.