Russia prevents the departure of 25 million tons of wheat, much to the anger of experts, who fear a global food crisis with serious consequences for the stability of some African countries and possible waves of migration to Europe
Few knew that Russia and Ukraine were two of the world’s granaries until war broke out. The fertile lands feed more than 400 million people in Europe, North Africa and the Middle East. And the cessation of exports threatens to trigger a global food crisis with unforeseen consequences, with many importers already experiencing supply difficulties and a rise in prices showing no signs of slowing down.
Vladimir Putin has made the deliberate attack on the global supply chain his main weapon to defend himself against the Western sanctions imposed after the invasion. It has already done this with gas, whose exports represent about 20% of world trade and 40% of purchases by the European Union, with a particular impact on German industry, the continental economic engine.
Now the blockade of the vast grain reserves stored in silos in the port of Odessa, the main port on the Black Sea, has sparked a chain reaction in which protectionism has become the option of many other countries to protect their domestic consumption.
India, one of the world’s largest producers, was one of the last to curtail its grain exports after a poor harvest caused by the early heat wave that even led to power cuts in the region. But according to FAO data, as many as 21 countries had already done so by the end of April 2022, a figure some organizations like Save the Children are already raising to 53.
Experts agree that the situation is already untenable for many regions in Africa and the Middle East, which import more than 50% of their grain needs from Russia and Ukraine. Moreover, countries that have suffered for years from the effects of climate change on their own crops, which in recent years have forced them to curb domestic production and withdraw imports for their supplies due to the low profitability of their country.
One of the countries most dependent on Ukrainian agricultural production is Lebanon (which imports almost 75% of the wheat it consumes from the country), followed by Libya (40%) or Tunisia (25%).
With ports closed tight and tight, it is estimated that Ukraine is still collecting 25 million tons of grain from its previous crop in the storage silos and in the fully reclaimed port of Odessa. And soon the grains of the new crop will arrive, although, according to calculations by the FAO, almost 30% of the fields in the region cannot be cultivated because of the war.
In recent weeks, Turkey has become the unexpected protagonist in the conflict, reaching a preliminary agreement with Russia to try to unblock maritime exports (which accounted for 90% of the total last year). His plan was to escort the ships carrying the grain. But Ukraine rejects the contents of the Putin-blessed agreement and demands that Moscow be allowed to inspect ships passing through the area.
The other options being considered for getting the point across don’t seem quite feasible. Ukraine exports about six million tons per month by sea. And the overland option doesn’t seem like the best option, as the trains only have capacity for 10% of what’s carried by ship. It could also be carried across the Danube. But it’s the same problem: smaller ships that won’t be able to release everything that accumulates at the same speed.
In this complex environment, the Chicago Stock Exchange is buzzing, a reference where these commodities are listed. Grain prices have shown a remarkable increase since the war. Bad weather, poor harvests and the supply crisis already stemming from the outbreak of the pandemic caused the price of wheat to fall from an average of $496 in 2019 to the close of 2020 at $640. Later, an upward path started that the grain price was already exceeded $800 in 2021.
In March of this year, just after the outbreak of war, wheat peaked at $1,425. That is, three times more than before the pandemic. This week prices have fallen to around $970, but this year the increase is more than 25% so far. And when compared to the closing data for 2019, the increase in grain prices is close to 75%.
“The cut in grain supplies is affecting the whole world because the basic diet of many countries relies on wheat, especially the poorest,” explains Juan Carlos Higueras, an expert professor of the agri-food sector at EAE Business School, who recognizes that this is a much more powerful weapon of war than tanks and missiles.
The data is convincing. The World Bank had already estimated that Covid-19 and the worsening income inequality brought about by the crisis could push 198 million more people into extreme poverty this year. Based on the studies of the institution, UNICEF and Oxfam calculate that now, if only because of the rise in food prices worldwide, another 65 million would be added to this group, reaching a total of 263 million people in extreme poverty. more this year, “corresponding to the population of Germany, Spain, France and the United Kingdom combined”, they denounce the organization.
According to a report prepared by Action Against Hunger, Oxfam, Unicef and Save the Children, 38 million people are already in a situation of food insecurity in the western Sahel, “the worst crisis in 10 years”. From these organizations they warn that “in the Horn of Africa, after the longest drought in 40 years, 23 million people in Kenya, Ethiopia and Somalia are also suffering extreme hunger”.
In the same vein, they have recently manifested themselves from the World Bank. “If food systems are weak, as we are currently seeing in many countries, it will lead to new conflicts, mass migration, etc.” Juegen Voegele, the agency’s vice president for sustainable development, warned at a recent seminar. “It is worrying that many vulnerable countries are paying more but getting less food,” the FAO warned in its latest edition of its ‘Food Outlook’ report published in early June. On a global scale, the prestigious publication ‘The Economist’ also warns that “a major food crisis” is on the way.
In this scenario, Brussels released a report this week warning of the impact this new hunger wave could have in regions such as the Maghreb, the Middle East or Latin America, with the North African countries now the main focus for a crisis that could unleash social unrest and a new migration avalanche towards Europe with Greece, Italy and even Spain as the main recipients.
To the war we must also add the crisis caused by climate change. Heat waves, floods and droughts mainly affect Africa, India and Pakistan, but Spain is not spared either. From Asaja, they calculate that the harvest will decrease by 50% this year due to the heat wave in our country, which will push prices up even further due to the lack of supply in light of the growing demand. Of the Exporters Club, its president, Antonio Bonet, notes that since the beginning of the 21st century, Ukraine has become, together with France, the main supplier of wheat to Spain, alternating between the first and second positions.
But small farmers and ranchers will not benefit from it, on the contrary, they will become the weakest link in the chain. Fertilizers have risen in price, as has energy and what to say about fuels. It should be remembered that Russia and Belarus, both sanctioned, are two of the largest producers of potash, one of the main components of fertilizer.
Farmers also pay much more for feed for their animals, which in turn drives up meat prices. Professor Higueras predicts that after the summer there will be a shortage of chicken meat in supermarkets because it is animals that eat a lot of grain and farmers are already making losses, which “will reduce production and sharply increase prices”.
“The problems in the value chains have far from softened, but continue to increase and there is a special concern about the rise in fertilizer prices, in recent historical highs that have led some countries to stop using them, which is a serious problem. poses a risk to food safety,” Airef president Cristina Herrero assured this week.
During a presentation on the institution’s economic expectations, Herrero recalled that the IMF has also warned that this access to fertilizers will be one of the key challenges on a global scale in the coming months. Their prices have increased by 20% this year. And three times that of the previous one. “Crop yields will be lower if less fertilizer is used, and what is grown will be more expensive to produce,” the agency warns in another analysis of the situation.
In addition, the PAC also admitted to the temporary relaxation of phytosanitary requirements (insecticides) for grain imports from countries previously subject to much stricter surveillance, such as Argentina and Brazil, which in the past ceased to be major producers. Something that will “dampen” the effect of the lack of Ukrainian grain, but will not cover all autumn, to which must be added the prices at which this product is imported from the other side of the world, with cargo ships crossing the Atlantic Ocean. .
Major global organizations agree that the time has come to take stronger action to address the situation. Time is running out and Brussels has already started launching the idea of creating a new migration pact in the face of the social chaos that is coming in many regions. But the major NGOs warn that aid must go further.
As UNICEF pointed out, funding to treat serious waste in many low- and middle-income countries is largely dependent on Official Development Assistance (ODA) donors. But food investment levels in recent years have been “minimal” and are expected to remain so because of the expenditures these years have had to make to mitigate the economic and health impacts of the pandemic. The most pessimistic hypotheses suggest that investment will not return to pre-pandemic levels until 2028.
UNICEF estimates that $725 million per year is needed to deliver the set of core interventions needed to address serious waste in 22 Global Plan of Action countries. Currently, the number available each year is often more than half that amount, so almost all children in need can be reached with just $300 million more in funding. “The risk that we will not be able to count on sufficient resources for the humanitarian response is a reality in Africa, but it is also likely that the few announcements of additional humanitarian funds will be used to respond as a priority to the crisis in Europe,” they denounce the organization.
In fact, they have already discovered the change in the allocation of funds previously programmed to deal with serious crises such as the Sahel, Syria, Yemen or Venezuela to cover the new commitments related to the crisis in Ukraine.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
