The crisis in Ukraine is still ongoing, and the food crisis is already on the way丨 data speaks

As the war between Russia and Ukraine continues, another crisis – the food crisis – is on the way.

On Tuesday, local time, the Food and Agriculture Organization of the United Nations warned that the conflict between Russia and Ukraine will lead to disorder in the supply of staple food, worsening the food supply that has been reduced due to the epidemic and climate change, thus dragging the world into a serious food crisis.

But in the eyes of some observers, the food crisis has already begun, and the question now is how far it will ferment and whether it will trigger new geopolitical upheavals.

The following charts illustrate these issues:

Increasingly severe famine and increasingly expensive food

According to the United Nations, the number of undernourished people worldwide remained largely stable from 2014 to 2019, but from 2020, the beginning of the outbreak, this number increased by about 70 million to 161 million from the previous year, rising to between 720 million and 810 million. That is, 1 in 10 people globally do not have access to enough food, including 1 in 5 in Africa who face hunger.

At the same time, food prices are climbing all the way. As can be seen from the price index released by the Food and Agriculture Organization of the United Nations in March, the prices of five grains, including wheat, milk tea, cereals, vegetable oil and sugar, have been rising continuously. The price index rose all the way from 98.1 in 2020 to 140.7 in February this year.

The shock of the pandemic, climate anomalies and high inflation were the main factors contributing to the rise in food prices, and the conflict in Ukraine, which began on February 24, was the latest and most important negative factor in driving up prices.

Ukraine and Russia are both big food exporters and food-related fertilizer exporters

For the past 30 years, the Black Sea region has been an important global exporter of cereals and oils. According to the Food and Agriculture Organization of the United Nations, at least one of the two countries ranks in the top three in the 2021 global export ranking of wheat, corn, rapeseed, sunflower seed and sunflower oil.

Data from Comerade shows that between 2018 and 2020, the two countries accounted for about one-third of global wheat exports, barley exports and sunflower seed exports accounted for about a quarter of the world's total, and more than 70% of the global supply of sunflower oil came from these two countries.

The war will not only reduce russian and Ukrainian food exports by disrupting supply chains, but will also indirectly reduce food production. On the one hand, it is the sowing season for crops such as corn and sunflowers, and due to the impact of the war, it is expected that food production will decrease; more importantly, Ukraine is also a big exporter of fertilizers.

Yara International, a fertilizer company with operations in more than 60 countries around the world, told the BBC last week that half of the world's population uses fertilizers for food, and without fertilizers, the yield of some crops would be cut. Shipping sabotage makes it increasingly difficult to import and export fertilizers.

"I don't think the question now should be whether we're going to face a global food crisis, but how big it's going to be."

The most affected African countries face the worst problems of hunger and political instability

The biggest victims of the food crisis happen to be both food-scarce areas and the regions that are most dependent on Russian-Ukrainian food exports.

According to the Food and Agriculture Organization of the United Nations, about 50 countries rely on more than a third of Russian and Ukrainian wheat.

The International Affairs Policy Research Council (IFPRI) said that in addition to wheat and barley imports that rely heavily on Russia and Ukraine, more than half of the cereal imported from North Africa and the Middle East comes from these two countries.

In another article, the agency specifically noted that Egypt is particularly at risk. Egypt is the world's largest importer of wheat, and in the past few years, nearly 40% of the calories ingested by the country's population have come from wheat, and more than 60% of the country's consumption of wheat is imported, and the most important source countries for imports are Russia and Ukraine.

The Economist warns that the Russian-Ukrainian conflict could lead to political unrest in Egypt. Egypt's stability stems from wheat imports, which are made into bread, which is provided to the population in the form of subsidies. In 1977, Egypt briefly abolished bread subsidies, followed by riots in Egypt.

IFPRI pointed out that it is the peak period for Egypt's wheat imports, and due to various factors, egypt is difficult to find alternative import sources, and the price of alternative food is soaring, making the Egyptian government's wheat import costs nearly double. The Egyptian government's bread subsidy program is already in jeopardy.

To make matters worse, sanctions imposed on Russia by countries such as Europe and the United States, as well as counter-sanctions by Russia (putin's government has asked its own fertilizer exporters to suspend exports), are further undermining the food industry's supply chain.

Whether a larger crisis is behind will depend on how the War between Russia and Ukraine evolves. It is an undeniable fact that although the discussion of anti-globalization has been going on for several years and has been practiced by many governments, the fate of the global industrial chain and the people of all countries has been deeply nested in each other.

Resources:

1. The State of Food Security and Nutri in the World 2021
2. FAO Food Price Index
3. The importance of Ukraine and the Russian Federation for global agricultural markets and the risks associated with the current conflict
4. Revisiting Ukraine, Russia, and Agricultural Commodity Markets
5. How will Russia’s invasion of Ukraine affect global food security?
6. Ukraine war 'catastrophic for global food'
7. The Russia-Ukraine crisis poses a serious food security threat for Egypt
8. Russia's invasion of Ukraine drives global food insecurity