The haze of the new crown pneumonia epidemic has not yet dissipated, and the military conflict between russia and Ukraine, the two "granaries of the world", has triggered another violent shock in the global market. According to the Global Network Against Food Crises Report 2022, released by the United Nations, the European Union, governments and non-governmental organizations, global food security has been intensifying since 2017, with about 193 million people in 53 countries around the world caught up in crisis-level or more in security in 2021, an increase of about 40 million people year-on-year. The Russian-Ukrainian conflict has exposed the relevance and fragility of the global food system, impacting the global food supply chain and threatening food security.
First, the important position of Russia and Ukraine in the field of global food security
(1) Russia and Ukraine are major producers and exporters of grain and agricultural products in the world
Russia and Ukraine are the world's largest producers and exporters of grain, and their wheat, corn, barley, oats, sunflower seeds, rapeseed and other food crops play an important role in the world food trade. Taking wheat as an example, according to the Food and Agriculture Organization of the United Nations, in 2021, Russia's wheat production will be 81.99 million tons, accounting for 10.56% of global wheat production (776.18 million tons); Ukrainian wheat production was 29.03 million tons, accounting for 3.74%. The chart below shows the share of some Crops in Russia and Ukraine in global production.
In addition, the food exports of the two countries involve a wide range of continents, including Europe, Asia and Africa, which are the main population concentrations. At present, about 50 countries and regions around the world are highly dependent on the supply of wheat from Russia and Ukraine, of which more than 50% of the wheat in 26 countries depends on Russia and Ukraine. In 2021, Russia exported 42.49 million tons of wheat, accounting for 21.99% of global wheat exports, making it the world's largest wheat exporter; Ukraine exported 20.36 million tons of wheat, accounting for 10.54%; Together, the two countries exported 62.85 million tonnes, accounting for a third of global wheat exports. It can be seen that the conflict between Russia and Ukraine is bound to exacerbate the global food supply shortage, lead to an increase in food prices, and endanger the food security of millions of people. According to statistics, as of February 24, 2022, about 1.1 million people have needed food and livelihood assistance, and about 400,000 people face food insecurity. David Beasley, executive director of the United Nations World Food Programme, believes that the world is facing an unprecedented famine year.
Image source: Food and Agriculture Organization of the United Nations
(2) Russia and Ukraine are important fertilizer producers and exporters in the world
Russia and Ukraine are not only big grain producers and exporters in the world, but also important fertilizer producers and exporters in the world. According to the Food and Agriculture Organization of the United Nations (FAO), in 2021, Russia is the world's largest exporter of nitrogen fertilizers, the second largest exporter of potash fertilizers, and the third largest exporter of phosphate fertilizers. At present, the continued war between Russia and Ukraine has led to a continuous rise in international energy prices such as crude oil and natural gas, which are important raw materials for the production of fertilizers and pesticides. Affected by this, the prices of chemical fertilizers, pesticides, agricultural films and agricultural materials have risen rapidly, further implicating the cost of planting and producing wheat, corn and other grains, and promoting the continuous rise in grain prices. Under the trend of continuous rise in global fertilizer prices, the Conflict between Russia and Ukraine may affect the global supply of chemical fertilizers, trigger global fertilizer price fluctuations, raise the cost of grain production, and affect the enthusiasm of farmers to grow grain.
Second, the impact of the Russian-Ukrainian conflict on global food security
(1) Seriously affect the global food supply
1. The dependence of global multinational grain imports on Russia and Ukraine is high
Russia and Ukraine are the world's main sources of food supply, and more than 30 net wheat importers are as dependent on Russia and Ukraine by 30% or more. Between 2016 and 2021, Egypt, Turkey, Bangladesh and the Islamic Republic of Iran, among the world's largest wheat importers, imported more than 60% of their total wheat imports from Russia and Ukraine on average. Lebanon, Tunisia, Yemen, Libya and Pakistan are also highly dependent on Russian-Ukrainian wheat, with an average of half of wheat purchases coming from Russia and Ukraine between 2016 and 2021. Data show that in 2020, Egypt imported $2.4 billion of wheat from Russia and Ukraine throughout the year; Bangladesh imports $700 million in wheat. Yemen, mired in civil war, imports an average of more than $300 million a year of wheat from Russia and Ukraine to sustain basic demand; Of the wheat imported by Tunisia, 44.7% came from Ukraine. Algeria and Turkey, affected by natural disasters in 2021, have exacerbated the need to import food from Russia and Ukraine to adjust their food reserves and consumption. After the Russian-Ukrainian conflict, the food supply of these countries has been affected to varying degrees.
Figure The net import dependence of some countries on Russia and Ukraine in 2021
Source: Food and Agriculture Organization of the United Nations
2. The uncertain prospects of war affect the grain production of Russia and Ukraine
At present, the prospects for war are uncertain, and it is unlikely that it will end in the short term, and the spring sowing of Wheat in Ukraine has been seriously affected. The most important wheat-producing region in Ukraine is located in the vast eastern part of the plains such as the Dnipropetrovsk Oblast, and this area of fertile agriculture is the area of fierce tug-of-war between Russia and Ukraine; Farmers in important growing areas in the south, such as Kherson and Zaporrija, have stopped sowing due to a lack of agricultural equipment, diesel, fertilizers and seeds, as well as interference from the conflict. In March 2022, Ukraine issued an emergency order banning the export of grains and other products, including wheat, oats, millet, buckwheat, sugar, salt and meat, in order to stabilize market demand and ensure the demand for food from its own people. Russia also announced in March that it would suspend exports of sugar to third countries until August 31 and cereals (wheat, mixed wheat, rye, barley, maize) to the countries of the Eurasian Economic Union until June 30. The disruption of grain exports between Russia and Ukraine has tightened the global food supply and international food prices have risen sharply, with wheat prices rising by 44 per cent and rice prices rising by 16 per cent since the beginning of the war.
3. The "seed" card neck curbs the lifeblood of the Russian-Ukrainian seed industry
Although Russia and Ukraine are major producers and exporters of food and agricultural products worldwide, their seeds are highly dependent on imports. Reuters reported that more than 30 percent of Ukraine's seeds depend on imports, mostly from France. According to a report released by consultancy APK-Inform, the import of seeds for Ukraine's main crop in 2020 exceeded $409.4 million, with 91% of imported cereal seeds being corn and 83% of imported oilseed seeds being sunflower seeds. Affected by the war, the transportation of French seeds was suspended for a time in the early days of the conflict. Similarly, according to relevant statistics, the current share of Russian corn seed imports accounts for about 60% of the total sown volume, rapeseed imports are 88%, sugar beets are nearly 100%, and potatoes, soybeans, sunflowers and rapeseed are also dominated by foreign seeds. On March 14, the World's largest seed company, the German Bayer Group, announced that it would stop "all non-essential operations" in Russia and Belarus, and decide whether to supply Russia with agricultural supplies for 2023 and beyond in the light of developments in Ukraine. U.S.-based grain merchants Cargill and Archer Daniels Midland also said they would scale back non-essential activities in Russia and stop investing.
(2) Fertilizer shortages exacerbate the food crisis
Fertilizers are the most conductive and sensitive materials in the global agricultural industry chain. Today, when global industrial agriculture is highly dependent on fertilizers, the fertilizer crisis in 2022 is likely to be as serious as the agricultural crisis.
Russia is the world's largest exporter of fertilizers. According to the International Food Policy Research Institute (IFPRI), Russia exports 15% and 17% of global trade in nitrogen and potash fertilizers, and Belarus, an ally of Russia, also exports 16% of the world's potash fertilizers. Among the nitrogen fertilizers imported by Mongolia and Central Africa, the proportion from Russia and Belarus reached more than 90%, and Peru, Burkina Faso and Côte d'Ivoire all exceeded 50%. In a range of African countries, including Chad, Central Africa, Niger and Mali, almost all of their potash imports come from Russia and Belarus. In Europe, nitrogen imports from Russia and Belarus accounted for 30% of total imports, while potash reached 60%. As the world's largest soybean producer, Brazil imports nearly half of its potash fertilizers from Russia and Belarus. At present, Brazil's domestic stock is only enough to use for three months. As for nitrogen fertilizers, Brazil has a self-sufficiency rate of only 5%, and 21% of the 95% of imports come from Russia. Brazil's soybean farmers' cooperatives have begun calling on farmers to reduce their use of fertilizers, which could further reduce soybean production in Brazil, which is already suffering from drought, affect feed production and push up global meat prices.
In addition, the Russian-Ukrainian conflict will also weaken Europe's own fertilizer production capacity, because natural gas imports from Russia are raw materials for fertilizer production and power guarantees. Nearly 40% of Europe's natural gas supply depends on Russia, and high oil and gas prices have overwhelmed European fertilizer manufacturers and have cut or stopped production.
(3) Interruption of transportation restricts the import and export of grain
The global "food crisis" is intensifying as a result of the Russian-Ukrainian conflict, disruption of sowing, destruction of agricultural facilities and infrastructure, and disruptions in transportation and logistics, which have hampered food production and exports. Ukraine exports 98% of its grain through its ports, nearly 25 million tons of grain are trapped in Ukraine and unable to export due to the blockade of Black Sea ports such as Mariupol by Russia, and the conflict has damaged Ukraine's inland transport infrastructure and seaports, as well as food storage and processing infrastructure, and even if the conflict is over, it will take a lot of time to restart agricultural production and infrastructure repairs, and perhaps for two or three years it will not be able to supply other countries.
(4) The impact on China's food security is small
Under the impact, the mainland's grain supply may be affected and tightened in the short term, the price of chemical fertilizers and pesticides has risen, resulting in an increase in planting costs, and the soaring price of crude oil and other energy has increased the cost of grain export logistics, but in the long run, the mainland's food security can be fully guaranteed.
According to the data of the seventh census, the current population of the mainland is 1.41 billion, and in 2021, the mainland's grain production will be 682.85 million tons, accounting for about a quarter of the world's total cereal production, and the per capita grain share is more than 470 kg, which is much higher than the food "safety line" of 400 kg per capita of the Food and Agriculture Organization of the United Nations. Secondly, the mainland's grain stocks are sufficient, and the two major rations of wheat and rice account for more than 70% of the total stocks, which can meet the consumption needs of the people of the whole country for more than one year, and the inventory-consumption ratio is much higher than the level of 17%-18% proposed by the Food and Agriculture Organization of the United Nations. At the same time, the mainland's grain production capacity continues to improve, in 2021 grain output reached a new high, more than 1.3 trillion catties, wheat and rice as rations to achieve basic self-sufficiency, to achieve 9% of the world's arable land, 6% of freshwater resources, to feed nearly 1/5 of the world's population. In addition, the proportion of grain imports on the mainland is not large, and in 2021, the total import volume of wheat on the mainland will account for only 7% of the total supply; In terms of corn, the mainland's self-sufficiency rate is more than 95%. Therefore, China's food security can be fully guaranteed, and it is less affected by the global food security crisis.
The prospects for a global food crisis in 2022 are grim
The Global Food Crisis Report 2022 divides the food crisis into 5 phases: the first phase (normal) to meet the basic food and non-food needs of households; The second stage (stress state), which is able to meet the minimum household food consumption, but cannot afford some of the necessary non-food expenditures without a coping strategy; Phase III (crisis states), barely able to meet minimum food needs through the consumption of basic assets, requires urgent action to sustain livelihoods; Stage IV (state of emergency), where there is a huge food consumption gap compared to the average household, and there are high levels of acute malnutrition and additional mortality due to lack of food, which require urgent action to save lives; In the fifth phase (state of disaster), even after the adoption of coping strategies, families are extremely short of food and other basic needs.
Under the influence of the Russo-Ukrainian war, the Report predicts that between 179 million and 181 million people will be in crisis situations at the third stage or above by 2022. 233.4 million people in 38 countries will be in the second stage of the food crisis and 125 million people will be in the third stage of the food crisis; 35.5 million people in 33 countries will be in the fourth stage of the food crisis; Somalia, South Sudan and Yemen will see 329,000 people trapped in the fifth phase of the food crisis. In Nigeria, for example, the number of people in the third stage of the food crisis or above is expected to reach 19.5 million by June-August 2022, an increase of 50% from the peak in the same period in 2021, of which the population in the fourth stage of the food crisis is expected to be close to 1.2 million.
At the same time, the food crisis situation in some countries may improve slightly. The economies of these countries have gradually recovered from the COVID-19 pandemic or resumed normal food supplies at the beginning of the year. The report predicts that the number of people facing a food crisis in the Democratic Republic of the Congo will be reduced by 1.4 million in 2022, Guatemala by 1.2 million, Malawi by 989,000, and Honduras by 650,000. However, these projections were made before the Russo-Ukrainian War and did not take into account the potential impact of the Russo-Ukrainian War on food security. Therefore, the actual situation may not be so optimistic.
Responses to the global food crisis
As mentioned above, the Russian-Ukrainian conflict has been driven by direct and indirect effects, which has escalated the global food crisis, and the urgency of striving to ensure global food security is self-evident. In this context, the international community must coordinate political will and mobilize the necessary resources to jointly address the food crisis from a humanitarian, developmental and peaceful perspective. Specific measures include the following:
(1) Building consensus and cooperating extensively
On 20 April, the Food and Agriculture Organization of the United Nations (FAO) called for the establishment of a global food import facility to help poorer countries cope with soaring food prices caused by the Russian-Ukrainian conflict and increase global agricultural productivity and resilience. Countries should fully recognize the serious threats to food security, build consensus, expand agricultural production and open trade, remove trade export restrictions, keep food trade unimpeded around the world, and maintain a basic balance between supply and demand in global food trade; Promote data-based food security analysis, forecasting and communication to support national decision-making and action.
(ii) Transition to more resilient food systems
The European Union, the Food and Agriculture Organization of the United Nations, the World Food Programme (WFP), the United States Agency for International Development (USAID), and the World Bank issued a joint statement in April stating that a sustainable solution to the food crisis requires addressing the root causes of structural rural poverty, marginalization, population growth, and food system vulnerability, and transitioning to more sustainable and resilient agri-food systems to address sudden and persistent food crises. For example, we will continue to increase investment in farmland and animal husbandry infrastructure, promote agricultural technology research, respond to climate shocks, strengthen agri-food risk management platforms, and provide farmers with financial support such as agricultural credit and disaster insurance.
(3) Ensure the safety of seeds and ensure the diversified production capacity of grain
Seeds are the foundation of food security, and countries should vigorously develop modern biological breeding technologies, using genome-wide selection, gene editing and synthetic biotechnology to improve the ability of seeds to withstand natural disasters such as drought to cope with climate problems; Increase seed yield while adding more beneficial nutrients to seeds to protect people's health. At the same time, we should vigorously cultivate our own grain production capacity, improve the variety structure, ensure the diversification of grain production capacity and international competitiveness, and avoid becoming a grain dumping ground in the United States and Western countries; Enrich the sources of grain imports, optimize the domestic supply structure and the structure of key grain and food imports, and avoid excessive dependence on large grain export countries.
(iv) Call for more humanitarian assistance
As a member of the Executive Board of the World Food Programme, China has made positive contributions to solving the problem of world food security and set an excellent example for the international community. China not only feeds nearly 20% of the world's population with 9% of the world's arable land, but also provides humanitarian assistance to the international community as much as possible to alleviate the world's food insecurity. In 2019, China donated 9,000 tons of emergency food to Ethiopia and more than 2,000 tons of rice to South Sudan; In 2020, China provided food aid to more than 300,000 poor people in Ethiopia and Guinea. To this end, in the current situation, we call for more humanitarian assistance around the world, help countries in food crisis, and work together to overcome the difficulties of the food crisis.
Author 丨 Liu Jin Zhao Xiaohan
Editor 丨 Zheng Shi
Introduction to the Institute
Founded in November 1985, the International Institute of Technology and Economics (IITE) is a non-profit research institution affiliated to the Development Research Center of the State Council, whose main functions are to study major policy, strategic and forward-looking issues in the development of the mainland's economy, science and technology, track and analyze the world's scientific and technological and economic development trends, and provide decision-making consulting services for the central and relevant ministries and commissions. "Global Technology Map" is the official WeChat account of the International Institute of Technology and Economics, which is committed to delivering cutting-edge technical information and scientific and technological innovation insights to the public.
Address: Building A, Building 20, Xiaonanzhuang, Haidian District, Beijing
Tel:010-82635522
WeChat: iite_er