The war in Ukraine will increase food insecurity around the world, especially in countries heavily dependent on wheat imports from that country and Russia, and push food prices even higher, panelists on a global trade webinar said Thursday.
“If the conflict results in a prolonged reduction in Ukrainian and Russian exports, it will further exacerbate food and fertilizer price increases, putting at risk the food security of many countries around the world,” said Beth Bechdol, deputy director general of the UN’s Food and Agriculture Organization in Rome, on the webinar hosted by the Washington International Trade Association.
FAO “predicts that due to the effects of this war, over 13 million more people could experience undernutrition in the next four years,” Bechdol said. That’s on top of the 811 million people – more than 10% of the global population — that FAO says are already chronically undernourished.
"Increased food prices will drive significant numbers of people further into poverty and food insecurity," she said.
Countries with already high levels of food insecurity such as Afghanistan, Somalia, Sudan, and Yemen, which rely heavily or exclusively on imports for staples like wheat, corn and cooking oils, are “much more vulnerable to these types of shocks,” Bechdol said.
Wheat grown in Russia and Ukraine normally accounts for about 30% of global exports and about 55% of the sunflower oil, moderator Caitlin Welsh, director of the Global Food Security Program at the Center for Strategic and International Studies noted. But Russia’s invasion has resulted in destruction of fuel storage facilities and cast serious doubt on the ability of Ukrainian farmers to sow and harvest crops.
Bechdol noted that the war has resulted in 4.3 million Ukrainian refugees, which translates into a “much-reduced agriculture workforce.” In addition, farmers, truck drivers, and operators of grain elevators have either fled the country or stayed to fight.
“There is clear damage to grain elevators,” she said, but added that “fortunately, it seems that a majority of the key grain silos and storage facilities are not currently under Russian control.” One-third of Ukrainian farmers surveyed by FAO have reported non-functioning supply chains, she said.
Bechdol and other panelists, who included Joe Glauber, senior research fellow at the International Food Policy Research Institute, and Jason Hafemeister, USDA’s acting deputy secretary for trade and foreign agricultural affairs, urged countries not to impose restrictions on food exports to protect domestic markets.
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“Supply chains have to be kept fully operational, export restrictions must be avoided and even condemned,” Glauber said. “Luckily, to date we haven't seen as many export restrictions as we have in the past.”
The shutdown of Black Sea ports has forced some grain buyers to search for other routes, such as Polish or Romanian ports, but Glauber said there are difficulties with that approach. Gdańsk, for example, on Poland’s Baltic coast, cannot handle Panamax-sized ships.
“It can be done, but at a very high cost,” he said about using a rejiggered supply chain.
“My concern is not only about wheat not being able to be harvested, but if it is harvested, where are you going to store it?” Glauber said. Much like in the U.S., Ukrainian farmers and grain handlers are “not really intending to hold grain for years, they’re going to try to get those silos empty before the new crop comes in.”
The bigger challenges, he said, revolve around fuel and fertilizer shortages, as well as the fact that some Ukrainian farmland is in a war zone right now.
Hafemeister also spoke against export restrictions but said “it’s also important that a number of countries are rolling back some import restrictions” by lowering tariffs and allowing the import of a wider variety of products including those produced with biotech seeds.
He said the current situation provides an opportunity to rethink import restrictions or policies that reduce production, mentioning specifically the EU’s Farm to Fork initiative that calls for steep cuts in the use of synthetic fertilizers and pesticides.
“Some of those European policies are now being paused,” Hafemeister noted. “And there's more interest in the EU in some of the innovation and technology solutions that we’re talking about.”
The EU has temporarily allowed ground fallowed for conservation to be sown because of the Ukraine crisis.
Glauber said the level of the crisis warrants suspending biofuel mandates, which he acknowledged “is not a very popular thing to say, in some circles.”
“I get the fact that people want to talk about energy, self-sufficiency, and things like that, but to me, food trumps that,” he said.
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