The effects of the war in Ukraine are already being felt around the world, from rattling global energy markets to causing a growing refugee crisis in Europe.
But the conflict could have more ripple effects, including triggering a global food crisis.
Russia and Ukraine account for around 30% of global wheat exports, while Russia is the world’s largest fertilizer exporter and a vital amount of the world’s wheat, corn and barley is trapped in two countries because of the war, while even more of the world’s fertilizer is stuck in Russia and Belarus.
Simultaneous disruptions to crops and fertilizer production are driving up food prices and sending economic shockwaves around the world. Since the Russian invasion on February 24, world prices for wheat have risen by around 21%, barley by 33% and some fertilizers by up to 40%.
After more than a month of war, economists and aid agencies say the world faces meltdown crises that could lead to a global food emergency.
Food and fertilizer prices were already at record highs before the conflict due to transport constraints, high energy costs and natural disasters. Supply was even tighter in the early weeks of the war, with Moscow limiting wheat exports and urging its fertilizer producers to temporarily suspend exports. Kyiv has also banned wheat and other commodity exports.
As the fighting continues and shows no signs of stopping, could the war in Ukraine be at a tipping point towards a global hunger crisis?
To find out more, RFE/RL spoke to Alex Smith, a food and agriculture analyst at the US-based Breakthrough Institute, a think tank focused on environmental issues.
RFE/RL: Explain how the war in Ukraine is linked to global food supply and prices and which parts of the world will be hardest hit and why?
Alex Smith: The primary means by which the Russian invasion of Ukraine can impact and alter food prices and the global food supply is through the disruption of Ukrainian agricultural exports.
Ukraine – and Russia too – are huge grain exporters to the world, especially wheat, corn, barley, as well as different kinds of plants and seed oils. Ukraine is the fifth largest exporter of wheat and the third largest exporter of maize in the world and they export wheat especially to many developing and lower middle income countries in the Middle East, North Africa, [and] South and Southeast Asia.
So if we are to see continued disruption of [those] wheat and maize exports, we are likely to see high food prices, but also acute food shortages in specific locations.
We are already seeing high food prices. I’m sure most people are aware of this to some degree. Disruptions to the Black Sea trade, which is responsible for around 90% of Ukraine’s grain exports, have upended commodity traders and the global food market.
We [already] peaked in late February [and] early March for wheat. The price of corn is very high and that’s before we even feel [the] real structural disruptions in Ukrainian agricultural production [from the war].
Ukraine is still a few months away from its 2021-2022 wheat harvest and we don’t see any [of the] further disturbances in terms of Ukrainian planting. But just in terms of export disruptions right now, we’re seeing a lot of fear [and] a lot of concern about which countries really depend on that agricultural supply.
RFE/RL: You mentioned the rise in food prices, but what are the economic risks that this entails? And how will it affect people around the world? Or is it already felt?
Black-smith: I think there is potential for high food prices globally because of this. As you get restrictions on the global food supply, it increases the demand for food from other places. Whether it’s wheat from Argentina or corn from the United States, it can take [any given] export from another country interested in this product.
In countries that are extremely dependent or dependent on Ukrainian food production – countries like Lebanon, for example – which depends on Ukraine for around 50% of its total wheat supply, or Libya, which again, [around] 43 percent of their wheat comes from Ukraine, which [places a] heavy burden on people who are already hungry [and] who are already struggling to pay for their food. And with that, you see a number of other general increases in the cost of living.
There are already hungry people who will now have to pay even more for the small amount of bread they can afford.
RFE/RL: What are some of the ripple effects that could be triggered by this, especially when combined with other political and economic factors and crises around the world?
Black-smith: I think we are still at the beginning of this crisis. The war has been going on for about a month [and] we have not yet seen these major structural challenges to Ukrainian agricultural production. We also saw for some time disruptions in the Russian agricultural trade, where Russian ships did not cross the Black Sea. [But] I think some exchanges have resumed, although it is [still] not clear, [as] a lot of information is not accurate.
But if the war continues [and] if there are serious disturbances of either [the] harvest or planting season in Ukraine and if you see further economic turmoil in Russia due to war that could [result in] that they ban grain exports, as they have done in the past, [such as] in 2020 and in 2010…then this crisis could get worse.
Russia has already banned grain exports to former Soviet countries until the end of June. If this ban becomes global [export] Russia’s grain ban, you could see a very serious shortage. Ukraine and Russia together account for about a quarter to a third of world wheat exports. So if you remove a quarter or a third of all the [world’s] wheat, that’s a really big portion that can’t necessarily be filled from [other exporting] countries like India, or the United States, or Australia, or Argentina that seek to substitute this demand.
[When] you start adding [the effects] other conflicts or crises [around the] world, it gets worse.
China, for example, [has] made noise recently about a very bad wheat crop. I think China’s wheat harvest may be the worst in recent history. Add to this the extremely high cost of fertilizers, which is also linked to the war, and then you see multiple factors that stimulate both the production and the supply of essential agricultural products, such as wheat and corn, [and] also an increase in the price of each agricultural product due to the increase [in the price] fertilizer.
I think it’s still too early to say this or that will happen. But we are coming to a crossroads this summer where all of these crises overlap with other crises that could lead to real and severe food shortages in some places and [see] world food prices at a level not seen since the 1970s.
RFE/RL: Given that the war shows no signs of slowing down, what can be done to offset some of these shocks that you have already mentioned?
Black-smith: I think the first thing you can go to is the international food aid organizations. Its flagship is the United Nations World Food Programme.
[But] they are also in trouble [due to] the war because they source about 50% of their cereals from Ukraine, which they then use as food aid. They were already looking for new sources of food and, with world food prices already high before the war, they were unable to meet the targets they had set before 2022 in terms of purchase. . [grains] and feed as many people as possible.
Their budget is totally dependent on voluntary donations from states, individuals and other organizations. So something that can be done is that the [countries] who are able to pay more, [such as] the United States, the United Kingdom, Western European countries, [and] countries that are already big agricultural exporters, they can quite easily give more money to the United Nations World Food Programme.
This [doesn’t have] a huge budget – I think the United States gives something like $6 billion a year to the United Nations World Food Program – but it would be useful to level that amount out so that there is this possibility of food aid really important.
And also countries that are large massive producers [can help] to replace this loss of grain.
China, for example, is [having] low yields this year for wheat, [but] they still have very large grain reserves which they can open up and export themselves. Same for India, [which has] a very large grain reserve because they have been a very large wheat producer for decades and they could open it [reserve] and send that out into the world in a way that doesn’t depend on their yields [from] this year, but is tied to yields [from previous years].
In total, there is more than enough capacity to fill this shortage. It can be costly as food prices rise, but it is necessary.