Poorer countries in northern Africa, Asia and the Middle East that depend heavily on wheat imports risk suffering significant food insecurity because of Russia’s war in Ukraine, and the conflict is poised to drive up already soaring food prices in much of the globe, the UN food agency warned Friday.
Ukraine and Russia, which is under heavy economic sanctions for invading its neighbour two weeks ago, account for one-third of global grain exports.
With the conflict’s intensity and duration uncertain, “the likely disruptions to agricultural activities of these two major exporters of staple commodities could seriously escalate food insecurity globally, when international food and input prices are already high and vulnerable,” said Qu Dongyu, director-general of the Rome-based Food and Agriculture Organization (FAO).
The UN agency also noted that Russia is the lead producer of fertilizer, and a key fertilizer component — urea — has jumped more than threefold in price in the last 12 months.
Also worrisome, Qu said in a statement, is the uncertainty over whether Ukraine’s farmers will be able to harvest wheat ready in June. In Ukraine, “massive population displacement has reduced the number of agricultural laborers and workers. Accessing agricultural fields would be difficult,” Qu noted.
Even if they could, Ukraine’s ports on the Black Sea are shuttered and its government this week banned the export of wheat, oats, millet, buckwheat and some other food products to prevent a crisis in its own country and stabilize the market.
Ukraine’s export ban does not apply to its major global supplies corn and sunflower oil. It and Russia together account for 52 percent of the world’s sunflower oil export market. They also account for 19 percent of the world’s barley supply, 14 percent of wheat and 4 percent of corn.
“It is still unclear whether (other) exporters would be able to fill this gap,” Qu said, warning that wheat inventories are already running low in Canada.
The United States, Argentina and other wheat-producing nations are likely to limit exports as governments seek to ensure domestic supply, he said.
Adding to the pressure, countries that rely on wheat from Russia and Ukraine are likely to increase import levels. Egypt, Turkey, Bangladesh and Iran buy 60 percent of their wheat from Russia and Ukraine. Also heavily reliant on those two countries’ wheat exports are Lebanon, Tunisia, Yemen, Libya and Pakistan.
“Supply chain and logistical disruptions on Ukrainian and Russian grain and oilseed production and restrictions on Russia’s exports will have significant food security repercussions,” Qu said.
FAO cautioned that if the conflict triggers a “sudden and prolonged reduction” in food exports by Ukraine and Russia, it could further drive up pressure on international commodity prices “to the detriment of economically vulnerable countries”. The UN agency said its simulations suggest that “the global number of undernourished people could increase by 8 to 13 million” in 2022-2023, particularly in Asia, sub-Saharan Africa, the Middle East and North Africa.
Shortfalls in grain and sunflower seed exports by Ukraine and Russia might only be able to be partially compensated by alternative sources, FAO said.
“Worryingly, the resulting global supply gap could push up international food and feed prices by 8 to 22 percent above their already elevated levels,” FAO’s report said.
According to FAO figures, food prices reached an all-time high in February. The COVID-19 pandemic already had a major effect on global food security, Qu said.
During 2021, global prices of wheat and barley rose 31 percent and rapeseed and sunflower oil prices jumped by more than 60 percent. Wheat prices have surged more than 50 percent since a week before the invasion.
Some consumers are already feeling the effects of a drop-off in exports as well as steep prices. In Italy, supermarkets in Tuscany and Sardinia are limiting sales of sunflower seed oil to two containers per customer, Italian state TV said. Spanish supermarkets are also rationing sunflower oil.
While the Italian diet is associated with olive oil, sunflower oil is used commercially to produce mayonnaise, sauces and some processed foods. Italian importers of the seed for processing into oil say their supply has already dried up.
Source: AP