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A daily article on global humanities and geography
WeChat public account: Earth Knowledge Bureau
NO.2171 - Some people fight, some people starve
Author: Sven's Fan Senior
Draft: Gu Hanyi / Editor: Tuna
Today's era is often described as the era of "globalization receding". If you look closely at the word, it is not difficult to find that it implies that it still belongs to the era of globalization. This is especially true for the international food market.
For example, our country has imported a lot of grain from Russia
(Photo: shutterstock)▼
The environmental carrying capacity of West Asia and North Africa is weak, but the population is rising rapidly with urbanization, resulting in a long-term dependence on imports for food. Eastern Europe is sparsely populated and has vast arable land, with food exporters large enough to affect international food prices.
Strong economic and trade ties were formed between the two, and Eastern Europe became the great granary of West Asia and North Africa. However, when the War broke out between Russia and Ukraine, the poor in West Asia and North Africa were pushed to the brink of starvation.
Wheat, corn and other bulk grain transportation is generally by sea
West Asia, North Africa and Eastern Europe are separated only by the Black Sea and the Mediterranean Sea
It can be seen that it is a good time and place, only the difference between people and ▼
Eastern Europe feeds the Middle East
Ukraine and Russia are located on the vast great plains of Eastern Europe, with flat and open land, and are one of the most important grain and oil producing regions in the world today. Known for its fertile black soil, Ukraine produces more than 60 million tonnes of cereals and legumes a year, two-thirds of which are used for export earnings. Ukraine is also the world's largest exporter of sunflower oil and the third largest exporter of honey.
Ukraine owns a quarter of the world's black land
The Great Plains of Eastern Europe are vast and flat, coupled with a temperate continental climate
This is the natural high-yield agricultural area - horizontal screen view▼
Russia's advantage lies in the large area of arable land. With the gradual arrival of agricultural technological progress and subsidies, Russian agricultural products have shown an explosive growth trend in recent years, which will not only basically meet the needs of the country, but also create more and more foreign exchange.
Over the past 20 years, Russia has gone from a weak agricultural country that needs to import 50% of its food to an agricultural powerhouse large enough to affect international agricultural prices.
The major customers of Russian wheat are concentrated in West Asia and North Africa
If the agricultural exports of Russia and Ukraine are added together, it will have a decisive impact on the international market. In the field of staple food alone, wheat and barley account for about a third of the world's exports.
Distribution map of the proportion of barley and wheat produced in Russia▼
Although the West Asia and North Africa region are large, the geographical conditions today are not suitable for the development of agriculture. Large areas of land have been controlled for a long time by dry, hot, subtropical and high pressures, forming famous barren lands such as the Sahara Desert and the Arabian Desert. Temperate continental climate zones with slightly better climates are usually higher in altitude, have larger drops, and do not have a vast area of arable land.
The vast Sahara Desert is the size of the Continental United States
But the only area where food production is really high is the tiny Nile Delta
Egypt is already an importer of food to feed hundreds of millions of people – a horizontal view
Although the Mediterranean climate zone is relatively rich in products, it is only distributed along the Mediterranean coast, and its area is too small to carry too many people. The population explosion brought about by modernization has exacerbated the food shortage in West Asia and North Africa, and the cheap grain of Ukraine and Russia has become an indispensable source of local food rations.
Egypt is one of the most obvious examples
There are a large number of poor people in the country who depend on financial subsidies for their livelihoods
The pie is sustained by food imports
Eastern Europe and the Middle East are separated by only two small oceans, the Black Sea and the Mediterranean Sea, and the sea route can transport a large amount of grain at low cost. Moreover, the Middle East and Eastern Europe are wheat as the main grain, and they also use corn to partially replace the dietary habits of the staple food, and the supply and demand are very suitable. Last year alone, more than 40 percent of Ukraine's wheat and maize exports went to the Middle East and Africa.
Countries and regions that used to rely on imports of Ukrainian food to maintain food security
It is estimated that they are now helpless and sleepless at night (Photo: OEC)▼
There are 14 countries with more than 10% dependence on Ukrainian wheat, most of which are distributed in West Asia and North Africa. Last year, Lebanon imported 700,000 tonnes of Ukrainian wheat, accounting for 50 percent of total wheat imports. Libya's 43 percent of its wheat imports come from Ukraine, compared with 32 percent in Tunisia.
Bread is a staple food of the people of Europe and the Arab world, and it is inseparable from three meals
Today, Russia is the world's largest exporter of wheat. In 2020, African countries imported $4 billion worth of agricultural products from Russia, about 90 percent of which was wheat. Syria will import about 1.5 million tons of wheat in 2021, mostly from Russia.
In addition to staple foodstuffs, Ukraine and Russia account for 75% of global sunflower oil exports and 10% of all edible oils. The self-sufficiency rate of sunflower oil in the grain exporter Turkey is only 64%, and the gap is mainly filled by Ukraine. In general, there are always some agricultural product categories in The countries of West Asia and North Africa that depend on Ukraine.
Whoever controls the black land has the wealth code
Eastern Europe is at war and the Middle East is starving
For the countries of West Asia and North Africa, corruption, economic backwardness, the disparity between rich and poor, religious extremism, a soaring population, and high unemployment among young people are all intractable diseases. Recently, West Asia and North Africa have been affected by the COVID-19 pandemic and severe drought, and the economic situation and food security have been overwhelmed.
Today, the war in Ukraine has further pushed up food prices, which is bound to exacerbate the poverty and discontent of the local poor and will have a further impact on the government.
The already poor life is even worse (photo: One Map Network)▼
Egypt, 2,400 kilometers from Ukraine, is the country with the largest wheat importer and the epitome of the dependence of West Asian and North African countries on grain from Eastern Europe. In recent years, 60% to 80% of Egypt's wheat imports have come from Russia and 10% to 30% from Ukraine, which together will account for an absolute proportion.
Egypt seems far beyond the flames of war
But more than 60% of the wheat comes from Russia and Ukraine... The problem of eating is as big as the sky
(Photo: OEC)▼
A significant portion of this wheat is made into limited-supply welfare flatbread and sold at prices well below cost. On the one hand, countless poor people depend on the welfare pie to make ends meet, and on the other hand, ordinary people who are not so difficult have also eaten the welfare pie with peace of mind for decades, and they take it for granted.
It's dry and hard, but it's good to be cheap, and the poor are happy (Picture: One Map Network)▼
The flatbread subsidy, which consumes more than 45 billion Egyptian pounds (about $2.9 billion) a year in Egypt's budget, has become a heavy burden with long-term implications. As early as last November, the Saisi government decided to choose an opportunity to raise the price of welfare cakes, but it did not dare to put it into practice.
Because the welfare pie is not only an economic issue, but also a highly sensitive political issue. Every time rumors of price increases come out, they provoke a round of reflexive protests, and the Mubarak government is not far away. Today, Egypt's food imports will face a huge shock, and the Egyptian government may become even more vulnerable to the dilemma created by the pie.
Egypt's "last pharaoh" Mubarak was forced to abdicate by popular demonstrations
It can be seen that popular sentiment is a big problem that the Egyptian government must not face
Egypt is at least a great power in the Middle East, and the impact on the weak countries will only be greater. In Syria, where the war is still not over, wheat stocks are only enough to last for two months, and its government has announced cuts in spending and rations. After the explosion at the port of Beirut, Lebanon's most important granary was also destroyed. As a result, the country's capacity to transport and store imported grain has declined, and wheat is currently only able to last for one and a half months.
The devastation of war continues to hurt syria
Even the surrounding areas starved
(Beirut Big Bang Picture: Figure Worm)▼
These weak countries have begun to turn to the international community, hoping to use the power of the powerful to tide over the difficulties. To help these countries, the powerful must act quickly. Because it takes only 7 days to import wheat from Ukraine to be shipped to Lebanon, but imports from the United States can take up to 25 days.
The long time is secondary, and the key is that some powerful countries are not necessarily willing to help
Turkey's staple food always exceeds the domestic demand every year, and the fruit is exported overseas. It is likely to be a temporary alternative source of imports for Middle Eastern countries, but Middle Easterners are not optimistic about it, according to an Iraqi grocery store owner: "Turkey will undoubtedly take advantage of the situation in Ukraine to raise prices." In fact, Turks are also bearing a 54.4% year-on-year increase in CPI and are starting to snap up cooking oil in supermarkets.
Inflation in Turkey is already frighteningly high and has been going on for a long time
Now there are food problems in the world
The financial crisis has turned into a real existential crisis
(Only money is the least valuable, pictured: shutterstock)▼
The global wheat supply chain is not disrupted. But fears of further deterioration, wheat prices have soared 55 percent since the week before the Russo-Ukrainian war, and even more frightening is the priceless market. Even though wheat prices have risen so much, upstream companies are still not willing to sell their stocks. Because on the one hand, enterprises are bullish on wheat prices, on the other hand, inventories are relatively limited, afraid of difficulties in summer grain acquisition, affecting the turnover of enterprises.
The Ukrainian grain company Nibulon (Nibulon) in a wheat warehouse in Nikolayev
(Afraid of an operational crisis, they are all stuck in the army, picture: wiki)▼
Critical food security
Chicago wheat futures rose to a halt on March 7 at $12.94 a bushel, the highest level since 2008. Such high food prices may persist for a short time, as war has medium- and long-term effects on food production.
Originally, although the precipitation in Eastern Europe was slightly less last year, the temperature and light conditions were higher than in previous years, and it was expected to usher in a bumper harvest of wheat and corn, but the outbreak of war made the harvest year a bad end.
The new tractors are all bought, and you tell me there's a war
Ukrainian wheat is usually planted in the autumn and harvested in the summer of the following year, which is the growing season of wheat. Maize, barley and sunflower seed yields would have been more affected by the war, as the planting season for these three crops in the Northern Hemisphere is usually from March to May. It is not difficult to see that if the war continues to procrastinate, it will affect the agricultural time.
Crop sowing schedule▼
With millions of people fleeing or fleeing to war, large numbers of Ukrainian farmers have had to leave their land, and the impact on Ukraine's agricultural production is still difficult to estimate. Moreover, Ukraine has lost its sea control, the coastal areas are generally occupied by the Russian army, and even if there is food, there is probably no opportunity to transport it. Russia, another agricultural power, is facing increasing sanctions from the Western world, and grain exports will inevitably be affected.
On March 11, the United States revoked Russia's "most-favored-nation status"
In fact, when Europe and the United States jointly used SWIFT to sanction Russia
Much of the actual U.S.-Russia trade practice has stopped
In addition to disrupting Ukraine's agricultural production in the current season, the war also affected the global fertilizer industry, which in turn affected global agricultural production. The purpose of the sanctions is to hit the Russian economy, which is highly dependent on natural gas exports, so the Russian gas industry has become the focus of the sanctions, and natural gas is an important raw material for fertilizers.
Natural ammonia fertilizer is the product of biogas digesters
Industrial production of ammonia fertilizer requires a large amount of natural gas
In fact, in 2021, before the Ukraine crisis has fully erupted, ammonia as an intermediate product has risen by 255%. The sharp rise in global natural gas prices this year is bound to further push up the price of ammonia and transmit it to the price of fertilizers. In addition, natural gas is also a raw material for a variety of pesticides.
The main component of natural gas is methane, as the simplest hydrocarbon compound
Methane is a raw material for the industrial synthesis of many organic matter (e.g. urea)
The single yield of modern agriculture is several times that of traditional agriculture, and such achievements are made by chemical fertilizers, pesticides and fine seeds. To ensure yields, agriculture is inseparable from fertilizers and pesticides. Then the majority of farmers and agricultural enterprises are left with only two choices, either sacrificing production to use less fertilizers and pesticides, or bearing higher production costs.
Large-scale production has become highly dependent on urea and pesticides
Small family workshop-style thin field farming can only take the green, organic "high-end route"
(Photo: Flickr)▼
The elasticity of demand for grain is very small, and it is impossible for people in the world not to eat because of the increase in the price of grain, so there is no situation of reducing demand and forcing grain prices to be reduced, and the cost increase will definitely be transmitted to the selling price. The choice between supply reduction and cost increase can only lead to higher food prices.
As a populous country, China's rigidity in food demand is the strongest
As a strategic commodity, annual price fluctuations are not allowed to exceed 3%
Of course, countries with high food self-sufficiency rates are much safer, and if fossil fuels are equally self-sufficient, it will be really a peace of mind. If there is a war overseas, you can also rely on exports to send a wave of war wealth.
In the context of today's Russo-Ukrainian war, the worst are the countries that are highly dependent on Ukrainian food. According to Arno Petit, director of the International Cereal Council (IGC), if the war continues, countries dependent on Ukrainian wheat could face food shortages starting in July.
At present, it seems that the most inexpensive in war is not Ukraine or Russia, but West Asia and North Africa, thousands of kilometers away.
Resources:
1.https://www.spglobal.com/commodity-insights/zh/market-insights/latest-news/agriculture/022422-factbox-russias-ukraine-invasion-seen-disrupting-vegetable-oil-grain-trade-flows
2.https://cn.nikkei.com/industry/agriculture/47615-2022-02-14-11-21-14.html
3.http://www.easdri.org.cn/newsinfo/518486.html?templateId=1133604
4.https://www.bbc.com/zhongwen/simp/world-60521964
5.https://globalnews.ca/news/8662158/russia-ukraine-war-global-food-supply/
6.https://www.bbc.com/news/business-60623941
*The content of this article is provided by the author and does not represent the position of the Earth Knowledge Bureau
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