Russia’s war on Ukraine threatens food security around the globe
Thousands of miles away, Ukrainian farmers were expected to plant over 40 million acres of grains, oilseeds, forages, and vegetable crops this spring--enough to feed their own population and be a key supplier to other parts of Europe and Africa. But since Russia's invasion of this eastern European country on Feb.
24, all bets are off. The repercussions of this combat will be felt around the globe for months if not years to come.
Throughout the spring, Ukrainian farmers were short on diesel, fertilizer and the labor needed to put crops in the ground or care for livestock. They've been bombed, occupied, had their fields mined and tractors destroyed by the Russian military. Ukrainian farmers have even had their grain stolen and sold overseas while they struggle to export even though their ports are blocked.
Amazingly, these farmers have done their best to adjust with Russian troops nearby and bombs sometimes landing in their fields. Ukrainian farmers have been doing "significantly better than first feared," according to a recent report "Food Security and the Coming Storm," which chronicles how the war is affecting global food markets in several ways, including declining Black Sea exports, higher global fertilizer prices and the potential for political instability as hunger rises. According to the report:
o Russia and Ukraine produce 14% of global wheat supplies and 29% of all wheat exports; o The two countries account for 14% of worldwide barley production and one-third of global barley exports; o They contribute 17% of world corn exports; and
o Russia and Ukraine are pivotal to vegetable oil markets, which have faced tight supplies for close to two years. Nearly 80% of all sunflower oil exports come from the Black Sea region. The report, prepared by the Eurasia Group and Devry BV Sustainable Strategies using Gro Intelligence data, notes that the U.S.
Department of Agriculture, in its May 2022 World Agricultural Supply and Demand Estimates report, forecasts Ukraine's 2022-2023 wheat production and exports to contract by 35% and 47% year-on-year, respectively. Keep in mind: The war in Ukraine has already stalled exports of last year's crops that would normally flow via truck and rail from the Black Sea region. Ukraine's Black Sea ports are blockaded by the Russian navy and some key shipping channels have been mined--preventing seaborne exports to regions such as the Levant and North Africa.
Finding new routes to move the grain has not been easy, in part because of rail gauge built during the Soviet era that is wider than those tracks deployed across the rest of Europe. As a result, grain loaded on rail cars in Ukraine can't easily move into neighboring countries like Hungary. A train needs to be stopped at the border, unloaded and reloaded into a train that fits the European rail standards.
Countries in North Africa, the Middle East and Europe need that wheat and corn, and consumers there are watching as food prices inflate. Higher prices for animal fats and vegetable oils are helping drive what is expected to be a record global food import bill this year, forcing consumers to spend more and get less to eat, according to the United Nations' Food and Agriculture Organization. Total costs to import food worldwide are on their way to hit £1.8 trillion, with higher prices accounting for £49 billion of the increase and transport costs the remaining £2 billion.
"Worryingly, many vulnerable countries are paying more but receiving less food," FAO states in a recent Food Outlook report. Before the war, levels of hunger had already surpassed all previous records in 2021, with close to 193 million people acutely food insecure and in need of urgent assistance across 53 countries and territories. Because of Russia's invasion, nearly 6 million people migrated out of Ukraine, another 7 million were displaced internally, and another 47 million that are on the edge of hunger across Africa, said Kip Tom, a former World Food Programme and Food and Agricultural Organization representative from the United States.
Tom says the Arab Spring in 2007 will pale in comparison to the impact the war in Ukraine will have on the global food supply. "This is going to have a direct impact on those that can least afford it the most," Tom said. "That doesn't matter whether it's the United States, or in a developing economy. This is an epic proportion."
Editor's note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.com.