The Last Straw: Global food security further threatened by war in Ukraine

April 17, 2022

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3 min read

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What's going on here?

Following the Russian invasion of Ukraine, nations across the globe face price rises and grain shortages. This has put cracks in an already fragile market which faces the consequences of climate change.

What does this mean?

The effects of the war in Ukraine continue to demonstrate themselves as far-reaching. The UN’s Food and Agricultural Organisation (FAO) estimates that wheat exports from Ukraine make up around 10% of the market, while maize exports make up around 15% of the market. Russia, on the other hand, is the world’s largest exporter of wheat with nearly 17% of global exports. However, as the world continues to watch Ukraine grapple with war, this is coupled with market isolation sanctions implemented against Russia. The consequences of this has raised concern in the FAO which predicts Ukrainian farmers missing the crop planting season in May. As a result, low confidence that these usual figures will be met has led to price increases in multiple grains.

In fact, immediately after the invasion, prices of soya beans, maize, and wheat reached record highs for the past two decades, surpassing levels hit following the 2008 global financial crisis. Currently, they sit at two-thirds above prices a year ago, meaning on an individual scale, households are likely to foot the bill along with an already increasing cost of living due to increased energy prices and inflation. On a global scale, president of the International Fund for Agricultural Development, Gilbert Houngbo, notes “this could jeopardise global food security and heighten geopolitical tensions”.

What's the big picture effect?

An increase in wheat prices has the potential for knock-on effects as suppliers and distributors in the agricultural industry balance taking the hit themselves – risking jeopardy to their businesses – or passing on the cost further down the supply chain. The latter is likely to have an impact on other sectors including hospitality. Yet, In parts of the world which already face economic fragility, poverty, and rely heavily on wheat imports, the impact of shortages is likely to leave a lasting mark. Around 40% of those Ukrainian and Russian exports go to North Africa and the Middle East. Food scarcity in these areas means they make up a considerable proportion of the 1 in 10 people around the world who do not have enough food to eat. This means disruption to market transport networks and price increases may exacerbate poverty and starvation

Weakened economies in many Middle-Eastern countries due to budget deficits, reliance upon subsidised energy and food, and political instability means countries like Egypt, which imports 80% of its wheat, are likely to be hit the hardest. A plethora of government measures to ease the blow on consumers have been implemented across the region. One measure involves diversification of grain suppliers. Egypt has planned to acquire six million tonnes of wheat from local harvesters, whilst increasing farmer salaries as an incentive and demanding a minimum percentage of grains to be sold to the state. 

Only to worsen an already precarious situation, threats to food security are nothing new. Several factors have sent prices soaring even before the invasion. The first factor is the Covid-19 pandemic which saw, and continues to see, large-scale disruption to market transport routes and global food supplies. For the UK, the second factor is Brexit: further issues of shipping bureaucracy and negotiation with the EU and global importers already caused food prices to reach new heights before the pandemic. 

The third, and arguably most impactful factor, is climate change. Following extensive drought, wildfires, and floods from Latin America to Australia last year, the price of durum wheat increased by 90%. In the Horn of Africa, around Somalia, three years of drought has delivered failed crops, high livestock mortality, and amplified conflict and displacement in communities. To combat the effects of climate change, the EU was set to implement the sustainable food strategy ‘Farm to Fork’, marking a 13% drop in food production and a 20% drop in fertiliser use. However, calls for humanitarian action, and to scrap the strategy, from France, Spain, and Italy following the Ukrainian invasion may curtail this progress to deliver net-zero targets. Further action, therefore, becomes a balance between short-term and long-term remedies for a food security crisis.

Report written by James Evans

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