With the amount of grain and fertilizer entering global markets in Ukraine and Russia drastically reduced, experts fear a bleak period of scarcer and more expensive food this year. Experts warn that this will starve not only many Ukrainians, but also hundreds of millions of people around the world, which may trigger the worst food crisis since World War II.
Together, Ukraine and Russia produce nearly 30 percent of the world's wheat and 12 percent of calories. Without them, soaring food prices and shortages could trigger a wave of instability the world hasn't seen since the Arab Spring in 2012. The war nearly cut off food exports from both countries. Since these two countries (and Russia's sanctioned ally Belarus) also provide large amounts of fertilizer, a conflict in Ukraine could affect every farmer on the planet this year for the foreseeable future.
Wheat is grown in a field near Uzhhorod in the Zakapatia region of western Ukraine.
As conflicts drag on and the planting season begins, the ticking of the agricultural time bomb is getting louder. Many countries around the world rely on Ukraine and Russia for food. From 2016 to 2021, the two countries supplied a total of 19 percent of the world's barley, 14 percent of wheat, and more than half of sunflower products. Arif Husain, chief economist at the U.N.'s World Food Programme, said.
"If this war is not resolved in the coming weeks, things will get worse," Hussein said. "This means that Ukraine will not be able to grow corn." Winter wheat in the field does not fertilize and the harvest is drastically reduced. This is a real danger. They are a country of 40 million people, but they produce food for 400 million people. This is the reality of a globalized world. We're all together. "
Locked granary
Long known as Europe's breadbasket, Ukraine has become an agricultural powerhouse for many developing countries. Since 2012, better seeds, new equipment and better agronomy, coupled with massive investments by companies such as Cargill, Bunge and Glencore in grain processing infrastructure and oilseed crushing plants in Black Sea ports, have more than doubled Ukraine's exports. It is now one of the top five exporters of several important grains and oilseeds, from 10% of the world's wheat exports to nearly half of sunflower oil.
As the war progressed, food exports from Russia and Ukraine were restricted. As a result, wheat, corn and soybean prices have soared to the levels of the last global food crisis in 2012 and 2008, with wheat prices up 60 percent since early February.
On March 11, 39-year-old Spanish shepherd Cristóbal Jesus Calle Lopez (in Montejac) feeds his sheep wheat.
The early international food crisis sparked unrest, toppled governments in Madagascar and Haiti, and sparked the Arab Spring in the Middle East. Hussein said the world is more volatile today, with his agency providing relief to 128 million people last year — the most in its 60-year history.
"In 2008, we didn't have COVID," he said. "We have no war in Yemen or Syria, Ethiopia or northeast Nigeria. Due to the COVID-19 pandemic, government resources are limited. The debt levels of many poor countries are higher than ever. Inflation is at record levels. Even before the conflict in Ukraine, food prices were at 10-year highs and fuel prices were at seven-year highs. Coupled with unemployment and lost incomes and high prices, people are being squeezed on many fronts. This crisis couldn't have been worse.
The World Food Programme plans to feed a record 140 million people this year, including more than 3 million displaced Ukrainians and about 44 million in 28 countries on the brink of famine. Many of these countries depend on grain imports from Ukraine. These countries include Yemen, Afghanistan, Syria, Ethiopia and nearly a dozen other countries in the Middle East and Africa.
To make matters worse, WFP costs soared after the war, adding about $71 million a month and creating a $10 billion shortfall for the coming year. This forced them to start rationing their food supplies to those who needed them most.
A greater threat is imminent
The conflict in Ukraine and the resulting sanctions are spilling over into the global economy, driving up costs for key commodities such as wheat and fertilizer. Currently, about 13.5 million tonnes of wheat and 16 million tonnes of maize harvested by Ukraine and Russia last year are in trouble because of war and sanctions. Part of the gap could be filled by increased exports from Australia or India, both of which produced good wheat last year. But economists are worried about the fate of Ukraine's crops this year.
Wheat was loaded onto a bulk carrier at the port of Geelong, Victoria, Australia, on March 4.
Wheat prices have soared to their highest levels since 2008 amid growing concerns that Russia's war against Ukraine will lead to global shortages.
"Not only did we lose 6 million tons of grain and last year's harvest in Ukraine," said David Laborde, a senior analyst at the International Food Policy Research Institute in Washington, D.C., "but probably also lost 60 million tons." It is also possible to lose the next harvest, which no one can make up. "
That's not even the biggest problem, he said. Because Ukraine, Russia and Belarus also export large quantities of nitrogen and potassium fertilizers to the world.
"The biggest threat to the food system is the disruption of fertilizer trade," Labod said. "Wheat will affect some countries. Fertilizer issues can affect every farmer around the world and lead to a decline in yields for all foods, not just wheat. "
Before the conflict in Ukraine, the fertilizer market was already in turmoil. Belarus's potash exports are under sanctions after the government forced a Ryanair flight to land last year and arrested a dissident on board. COVID-19 has disrupted shipping and supply chains around the world. Last year, Hurricane Ada destroyed two large fertilizer plants along the U.S. Gulf Coast that have been struggling to restore production capacity, while the fire destroyed a plant in North Carolina. Last year, after soaring prices of natural gas, a major component of fertilizers, many European manufacturers reduced their nitrogen production. Europe, South America and African countries rely heavily on fertilizers imported from the Black Sea region.
Beyond that, Labold said, global stocks of wheat, corn and soybeans are at their lowest levels in more than a decade, and the export bans that caused such massive market disruption in 2008 are starting to re-emerge. Last fall, Russia banned fertilizer exports. As the world's largest importer and exporter of fertilizers - China's restrictions on fertilizer exports have directly affected the global fertilizer supply and demand balance, from a stable state to extreme tension, nitrogen fertilizer phosphate fertilizer urea and other international prices soared rapidly, and refreshed a new 13-year high. In 2021, China embarked on a massive grain and soybean buying frenzy to rebuild its own stocks as well as the pork industry, with an estimated 100 million pigs killed in the African swine flu outbreak. Earlier this year, China announced that it expected its worst wheat harvest in history, and independent experts have confirmed that it is in poor condition. China is also expected to import more grain this year, just to meet demand, said Arnaud Petit, executive director of the International Cereal Council, which monitors global grain trade.
"The grain market is more tense than it was in 2008 or 2013," Petit said. Due to the high demand from population growth and dietary changes, "we do not expect to rebuild inventories in the next five years." As a result, any climate shock or conflict will have an impact. "
All of this makes harvests in the rest of the world even more important. "What we can't afford right now is a big drought in Kazakhstan, Europe or Argentina," ifpri's Labod said. "The market is going to explode. I don't want to paint a bleak picture. If the earth is generous to us this year, we should be fine. But the current severe shock could bring us to the brink of a major food crisis. "