Russia-Ukraine war leads to worldwide food shortage and price hike adversely affecting  global food consumers

March 17, 2022

On March 14, the UN’s Secretary-General Antonio Guterres issued a stark warning about the wider threats of the war in Ukraine: world hunger. “We must do everything possible to avert a hurricane of hunger and a meltdown of the global food system,” he said.

The Russian war is affecting two of the world’s agricultural powerhouses and comes as the global food system is already dealing with supply chain constraints due to the Covid-19 pandemic and climate-charged weather events.

The comment echoed a similar concern voiced by David Beasley, the head of the World Food Programme, just a few days earlier: “The bullets and bombs in Ukraine could take the global hunger crisis to catastrophic levels. Supply chains and food prices will be dramatically impacted,” he said.

Ukraine, along with southwestern Russia, has long been known as “Europe’s breadbasket” thanks to the region’s rich dark soil, chernozem, among the most fertile in the world. The region accounts “for about 15 percent of the world’s wheat production, and nearly 30 percent of world exports,” Sébastien Abis, a researcher at the French Institute for International and Strategic Affairs (IRIS).

But it’s not just wheat,” Abis said, “the two countries account for 80 percent of the world’s sunflower oil production, and Ukraine is the world’s fourth-largest exporter of maize.”

As the fighting in Ukraine continues and the Russian offensive intensifies along the Black Sea coastline, these important crop producers have now been cut off from the world. “Nothing is leaving the Ukrainian ports anymore,” Abis explained, “and it is impossible to know what the country will be able to produce and harvest in the coming months”.

War is likely to at least temporarily halt Ukraine’s wheat, barley and corn exports, which could cause a 30 percent hike in wheat prices and a 20 percent increase in corn, according to an analysis published by Rabo bank. [Rabo Bank Analysis external link]

Vito Martielli, senior grains and oilseeds analyst with Rabobank, said wheat prices have already jumped about 15 percent since the report was published and Russian president Vladimir Putin declared war on Ukraine.

Where prices go from here will depend on the duration of the conflict, the severity of international sanctions against Russia and what happens to the various Black Sea ports in Russia and Ukraine, he said.

Russia is the world’s largest wheat exporter. The U.S. Department of Agriculture is forecasting that it will ship out 35 million tonnes of the crop in 2020-21.

Ukraine is the world’s third largest wheat exporter behind Russia and Australia with an estimated 24 million tonne export program this year.

Together the two countries account for 30 percent of global wheat exports.

The conflict has already had dramatic consequences for Ukrainians “who are struggling to find food amid the bullets”, he said. But it is also causing concerns for the many countries that depend on Ukrainian wheat and are increasingly worried they will soon be unable to feed their people.

Russia’s war in Ukraine is squeezing food supplies in countries that depend on those two nations for critical grains and cooking oils.

The halt in agricultural shipments out of the Black Sea has sent the price of wheat and fertilizer soaring and prompted growing concerns of a global food crisis.

North Africa is not the only region affected by the wheat shortage. Indonesia is the world’s second largest buyer of Ukrainian wheat, and Pakistan, Turkey, and several countries in Central Asia and sub-Saharan Africa depend on it as well. 

“I am particularly concerned about certain West African countries where cereal stocks are very low, especially in Mali, Burkina Faso and Senegal,” Abis said. “For these countries, the current prices are unsustainable.”

On Wednesday, the UN called for $4.3 billion in funds to help more than 17 million people in Yemen, saying the war in Ukraine could make the situation in the country – which has been plagued by war since 2014 – even worse. According to the UN, some 161,000 people in Yemen are likely to experience “catastrophic – or famine-like – levels of hunger” in the second half of this year.

The UN Food and Agriculture Organization (FAO) estimates that an additional 8-13 million people worldwide face undernourishment if food exports from Ukraine and Russia are stopped permanently.

Russia, the world’s leading wheat supplier, recently banned grain shipments abroad and sanctions are likely to affect future exports. Ukraine is a top supplier of sunflower oil and a major wheat producer in its own right. It has suspended port activity. Together, the two countries produce about 12 percent of the food calories consumed globally. The higher food prices have also contributed to a broader surge in inflation as economies recover from the coronavirus crisis and the FAO has warned that the higher costs are putting poorer populations at risk in countries reliant on imports.

Egypt, Turkey, Indonesia, and Bangladesh are the top importers of wheat from Russia and Ukraine. Almost 50 nations, including some of the world’s poorest countries, depend on those two sources for more than 30 percent of their wheat needs, according to the U.N. Food and Agriculture Organization.

In Turkey, people are scrambling to buy cooking oil in anticipation of further price hikes. Thailand faces surging costs for fertilizer and feed stock. Egypt, the top importer of Russian wheat, has banned exports of homegrown grain, and Indonesia has restricted exports of palm oil, a potential substitute for other vegetable oils.* Aid groups worry that rising prices will exacerbate hunger in already vulnerable countries.

News Courtsey- France 24

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