Wednesday, May 18, 2022
Outlook.com

Ukraine War Has Put World's Food Security At Risk As Wheat, Fertiliser Supplies Are Hit

Wheat prices have increased by around 42 per cent in weeks following the beginning of the Russian invasion of Ukraine.

Ukraine War Has Put World's Food Security At Risk As Wheat, Fertiliser Supplies Are Hit
Ukraine and Russia are major wheat exporters

Ukraine, which had long been called the breadbasket of Europe, became an agricultural powerhouse for the world’s developing countries in recent years with investment in food technology and storage and transport infrastructure.

Ukraine’s share in global wheat exports is around 10 per cent, whereas the Russian share is around 18 per cent. Around 26 countries in the world get more than half of their wheat supplies from these two countries, according to Arif Husain, chief economist at the United Nations World Food Programme.

The ongoing war in Ukraine has disrupted this food trade and has threatened the food security of countries dependent on Ukraine and Russia. Wheat prices, which were already rising since mid-2020, soared by around 42 per cent in weeks following the beginning of the Russian invasion of Ukraine, according to Forbes.

The issue goes beyond wheat supplies. Russia has a 14 per cent market share of barley and Ukraine 12 per cent, Russia has a 26 per cent share of world’s sunflower oil supplies, whereas Ukraine is the world’s largest export with a whopping share of 37 per cent. Russia, along with Belarus, is also a major fertiliser supplier to the world.

While Ukraine’s exports are disrupted because of diversion of farmhands from agricultural fields to battlefields and damage of food plants and ports in Russian attacks, the Russian and Belarus’s exports have been hit by Western sanctions.  

Fertiliser disruption will hit food production across the world

The prolonged reduction of food exports from Ukraine and Russia could cause an increase of 8-13 million people to the world’s undernourished population, according to an estimate of the UN’s Food and Agriculture Organization. 

As Russia and Belarus are also major fertiliser exporters, agricultural production in those countries that purchase their fertiliser from them is also set to be hit. 

Russia’s share in the world's fertiliser supply is around 17 per cent. Together, Russia and Belarus last year exported 40 per cent of the world's potash, according to Reuters. 

The news agency reported farmers across countries are already being pinched by the disruption. The prices in South Africa have risen by 60 per cent in the last two months and fertiliser is already being sold in the Indian black market, as per a Reuters story. 

“The biggest threat the food system is facing is the disruption of the fertiliser trade. Wheat will impact a few countries. The fertiliser issue can impact every farmer everywhere in the world and cause declines in the production of all food – not just wheat,” The National Geographic quoted David Laborde, a senior analyst at the Washington DC-based International Food Policy Research Institute, as saying. 

Ukraine War has caused record surge in food prices 

World food prices rose by nearly 13 per cent in March alone as per the UN FAO food price index, which is the largest surge since 1990 when the index began tracking the prices.

The FAO report said, “This month’s increase reflected a surge in world prices of wheat and coarse grains, largely driven by conflict-related export disruptions from Ukraine and, to a lesser extent, the Russian Federation.”

Production issues in the United States and reduction in meat production in China because of disease in pigs have also added to the shortage caused by the Ukraine War. 
 

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