A new report underscores how Russia’s ongoing war against Ukraine is escalating concerns over already high food price inflation and the potential for millions more to go hungry around the globe.
“It is like a tsunami — its cause can be on one side of the ocean but the devastating effects could spread thousands of kilometers away,” noted Ukraine President Volodymyr Zelenskyy in a speech to Global Citizen earlier this year.
“Food Security and the Coming Storm” chronicles how the war is affecting global food markets in several ways, including declining Black Sea exports, higher global fertilizer prices and the potential for political instability as hunger rises.
The report, prepared by the Eurasia Group and Devry BV Sustainable Strategies using Gro Intelligence data, was released Monday morning as part of the Global Citizen Now Summit in New York.
For example, the war in Ukraine has stalled exports that would normally flow from the Black Sea region. Ukraine’s Black Sea ports are blockaded by the Russian navy and some key shipping channels have been mined — preventing seaborne exports to regions such as the Levant and North Africa. In addition, overland transport over the country’s western border is insufficient to clear the inventory building in its storage facilities. According to the report:
- Russia and Ukraine produce 14% of global wheat supplies and 29% of all wheat exports;
- The two countries account for 14% of worldwide barley production and one-third of global barley exports;
- They contribute 17% of world corn exports;
- Russia and Ukraine are pivotal to vegetable oil markets, which have faced tight supplies for close to two years. Nearly 80% of all sunflower oil exports come from the Black Sea region.
While Ukrainian farmers have been planting and doing “significantly better than first feared,” the report notes that USDA, in its May 2022 WASDE report, forecasts Ukraine’s 2022-2023 wheat production and exports to contract by 35% and 47% year-on-year, respectively.
The report also looks at the “fertilizer crunch” which was “well underway before the Ukraine crisis” and is likely to get worse. “So far, global fertilizer prices have increased by more than 230% on the IMF world fertilizer price index since the onset of Covid-19.”
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Russia and Belarus are significant fertilizer exporters and the Russian government has already demanded that domestic producers stop exporting fertilizer.
At present, corn, rice, and wheat — the world’s main staple crops — are all huge users of fertilizer, absorbing 16%, 14% and 15% of the global fertilizer supply respectively. The low availability and high cost of fertilizer will extend much further beyond these staple crops, the report notes. “Dairy and meat prices will escalate as a consequence of higher feed prices, as nearly 40% of global corn production is used as livestock feed," it says.
The report looks at three potential scenarios for the war over the next three months — a prolonged stalemate (70% probability); escalation into a scorched-earth campaign (25% probability); and a climbdown from the conflicts (5% probability) and analyzes the potential impact by pairing these probabilities with Gro Intelligence estimates.
“The numbers surrounding global food insecurity are alarming: In the next six months the world could see as many as 240 million more people become food insecure, between 3.5 million and 7 million more wavering on the edge of famine, and an additional 200 million living in extreme poverty,” noted Michael Sheldrick, co-founder and chief policy, impact, and government relations officer, Global Citizen. “Eurasia Group’s report helps us more clearly envision the “hurricane of hunger” that hurtles towards us.”
Before the war, levels of hunger had already surpassed all previous records in 2021, with close to 193 million people acutely food insecure and in need of urgent assistance across 53 countries and territories.
To read the full report, which was supported by Bayer, click here.
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