By the Staff of The Week
Russia’s invasion of Ukraine has sent world food prices skyrocketing, leaving millions at risk of going hungry. With no end in sight of deadly conflict, the situation will no doubt get much worse before it gets better.
Why the food shortage?
The Russian invasion and the sanctions on Moscow that followed have dramatically reduced the production of crops and fertilizer in Russia and Ukraine, driving vulnerable areas in the Middle East and Africa to the brink of famine. The two large countries are both major producers of wheat, corn, and barley, while Russia and Belarus produce much of the world’s fertilizer. Prices of those goods had already been trending upward due to global inflation and shortages caused by COVID-19, as well as the rise in gas prices that increased the cost of shipping. Now the war has made virtually every component of the global supply chain far more expensive. Supermarket prices are expected to rise by as much as 20 percent, while at least 44 million people are at risk of famine. For them, the war is “a catastrophe on top of a catastrophe,” said David Beasley, executive director of the U.N.’s World Food Program. “We never would have dreamed anything like this would be possible.”
Are Russia and Ukraine still exporting food?
Many Ukrainian farmers have gone to the front lines to fight, and the farms they left are being ravaged by Russian shelling. That means Ukraine’s spring harvest of barley, corn, and other crops — projected to be a strong season before the war — will be less than half of the 2021 level, the Agriculture Ministry says. Ukraine banned exports of wheat and other food last month to secure its own wartime supplies, but at this point it can’t really export anyway: Russian warships are blocking access to its Black Sea ports and have bombed at least three civilian ships carrying Ukrainian goods. Ukrainian farmers will likely also miss their coming planting season, and those who are still in the fields have scrapped export crops in favor of foods that can be quickly harvested to feed civilians and soldiers. Russia’s own ability to export, meanwhile, has been hamstrung by sanctions.
Can’t the loss of food be made up?
While the two countries generate about 30 percent of the world’s exported wheat, that’s still less than 1 percent of the world’s total wheat — and other producers, such as India, grew more wheat last fall in anticipation of a Black Sea conflict. But it takes time for recipient countries to rearrange their supply chains and place orders with new sources. And the supply of labor to deliver those orders is running short, as Russians and Ukrainians together make up about 15 percent of the world’s shipping workforce. Panicked investors have sent wheat prices soaring by as much as 50 percent, and civilians have resorted to hoarding, particularly in Arab countries that depend on imports for staple foods. Those countries are already rationing. Egypt, which relies on Ukraine and Russia for about 85 percent of its wheat imports, has now fixed the price of bread, while Tunisia is limiting sales of semolina, used in couscous.
How bad will things get?
Arab countries fear the worst. They remember that the high food prices of the Great Recession were a major factor in the Arab Spring protests that erupted a few years later. In conflict-ridden Yemen, 31,000 people already face famine conditions, and that number could increase fivefold this year. But the pain will be felt everywhere. European supermarkets are low on flour and sunflower oil, while Indonesia is almost out of its beloved Indomie instant noodles, made with Ukrainian wheat. Cameroon’s bakeries are seeing long lines for bread. Somalia is facing its worst drought in decades but can’t turn to Egyptian imports to make up the difference. “From Mogadishu to Moscow,” says Abdullahi Nur Osman, CEO of the Somali charity Hormuud Salaam, “the world is deeply interconnected.”
Why is fertilizer more expensive?
Russia and Belarus are major exporters of potash, ammonia, urea, and other crucial fertilizer components used everywhere from Iowa to Zimbabwe. Before the war, the U.S. had already sanctioned Belarusan potash because of dictator Alexander Lukashenko’s human rights abuses, and Europe has now followed suit. When Russia blocked its own fertilizer exports last month, farmers around the world began scrambling, cutting back on planting and switching to manure. “It’s just kind of a shock for the grain system,” said Mike Carstensen, a wheat farmer in Washington state. “It’s not all rosy down on the farm.” Brazil, the world’s largest producer of coffee, soybeans, and sugar, imports nearly 30 percent of its fertilizer from Russia, and Belarus and is now considering opening up protected indigenous lands to potash mining.
What can be done?
The U.S. government said it’s in talks with Canada and European countries to ship more food aid to hungry countries and help farmers boost crop yields. France is considering food vouchers for its citizens, while the United Kingdom has cut gas and diesel taxes to ease pressure on deliveries. China, meanwhile, has been buying up U.S. soybeans, corn, and other supplies. But each country’s vulnerability to price shocks will be unique, said Derek Headey, senior research fellow at the International Food Policy Research Institute, and the complexity of the global supply chain makes it difficult to determine whether any particular price is rising because of the war or the pandemic or some other cause. “We thought 2007-08 was a perfect storm,” he said. “This one seems like a more perfect storm.”
Farm equipment imperiled
The war is also worsening a global semiconductor chip shortage. That, too, translates to bad news for the food supply, because practically all modern farm equipment — from combines to tractors to planters — relies on semiconductors. Ukraine produces half the world’s neon, a critical component of semiconductor chips, and nearly all of that production has been cut off. One of Ukraine’s two biggest neon producers, Ingas, is based in the southern port city of Mariupol, which has been under relentless Russian siege and bombardment for more than a month. The other, Cryoin, is in Odessa, which is suffering airstrikes and bracing for worse. While the U.S. plans to invest billions in domestic chip production, it won’t get far without a supply of neon.
Credit: The Week