Russian war in global ‘breadbasket’ threatens food supply

Although there have been no global wheat supply disruptions yet, prices have jumped 55% since a week before the invasion amid concerns about what might happen next. If the war drags on, countries that depend on Ukraine’s affordable wheat exports could face shortages from July, International Grains Council director Petit Arnold told The Associated Press.

This could create food insecurity and push more people into poverty in places like Egypt and Lebanon, where diets are dominated by government-subsidized bread. In Europe, officials are bracing for potential shortages of produce from Ukraine and higher livestock feed prices, which could mean more expensive meat and dairy products if farmers are forced to pass on the costs on customers.

Russia and Ukraine share almost a third of world wheat and barley exports. Ukraine is also a major supplier of corn and the world leader in sunflower oil, which is used in food processing. The war could cut food supplies just as prices are at their highest since 2011.

Protracted conflict would have a big impact some 1,500 miles (2,400 kilometers) away in Egypt, the world’s largest wheat importer. Millions of people depend on subsidized bread made from Ukrainian grain to survive, and about a third of people live in poverty.

“Wars mean shortages, and shortages mean (price) hikes,” said Ahmed Salah, 47, a father of seven, in Cairo. “Any hike will be catastrophic not only for me, but for the majority of people.”

Anna Nagurney, professor of supply chains, logistics and economics at the University of Massachusetts at Amherst, said: “Wheat, corn, oils, barley, flour are extremely important for security food… especially in the world’s poorest regions.

As the Ukrainian men were called to fight, she said, “Who is going to do the harvesting? Who would do the transport?

The Egyptian public wheat buyer, which normally buys a lot from Russia and Ukraine, had to cancel two orders in less than a week: one for excessive prices, the other because a lack of companies offered to sell their supplies. Sharp increases in the cost of wheat globally could severely affect Egypt’s ability to maintain bread prices at their current subsidized level.

“Bread is extremely heavily subsidized in Egypt, and successive governments have found that cuts to these subsidies are the final straw that must be avoided at all costs,” wrote Mirette Mabrouk, senior researcher at the Institute of Middle East. a recent analysis.

War-ravaged Syria recently announced it would cut spending and ration basic commodities. In neighboring Lebanon, where a massive explosion at the port of Beirut in 2020 destroyed the country’s main grain silos, authorities are scrambling to make up for a forecast shortage of wheat, with Ukraine supplying 60% of its supply. They are in talks with the United States, India and Canada to find other sources for a country already in financial crisis.

Even before war threatened to affect wheat supplies in sub-Saharan Africa, Kenyans were clamoring for #lowerfoodprices on social media as inflation eroded their purchasing power. Now they are preparing for the worst.

African countries imported agricultural products worth $4 billion from Russia in 2020, and around 90% was wheat, said Wandile Sihlobo, chief economist at the South African Chamber of Agricultural Affairs.

In Nigeria, millers believe a shortage of wheat from Russia would affect the price of products like bread, a common staple in Africa’s most populous country.

“We all have to look elsewhere” in the future, said Tope Ogun of Honeywell Flour Mills Plc, one of Nigeria’s biggest flour millers. “We may not get what we need, and there will probably be an increase in price.”

Nigeria has been scrambling to reduce its dependence on Russian grain, with farmers moving to plant more wheat fields to try to meet 70% of the country’s demand in five years, Gambo Sale said. National Secretary of the Wheat Growers Association of Nigeria.

“We have the land, we have the people, we have the money, we have everything we can need in Nigeria” to grow wheat, he said. “All we need now is time.”

The disruption can be felt as far away as Indonesia, where the wheat is used to make instant noodles, breads, fried foods and snacks.

Ukraine was Indonesia’s second-largest wheat supplier last year, supplying 26% of the wheat consumed. Rising noodle prices, in turn, would hurt low-income people, said Kasan Muhri, who heads the Commerce Ministry’s research division.

Ukraine and Russia also combine for 75% of global sunflower oil exports, accounting for 10% of all cooking oils, IHS Markit said.

Raad Hebsi, a wholesaler in Baghdad, said he and other Iraqis were preparing to pay more for their cooking oil.

“Once the stocked items are sold, we will see an increase in prices for those items,” he said. “We will probably buy alternatives from Turkey, and Turkey will undoubtedly take advantage of the situation in Ukraine and raise its prices.”

Farmers in the United States, the world’s largest corn exporter and major wheat supplier, are waiting to see if U.S. wheat exports soar. In the European Union, farmers are concerned about rising feed costs.

Ukraine supplies the EU with just under 60% of its maize and nearly half of a key component of cereals needed to feed livestock. Russia, which supplies the EU with 40% of its natural gas needs, is also a major supplier of fertilizers, wheat and other basic products.

Spain is feeling the pinch both from sunflower oil, which supermarkets are rationing, and grain for the important livestock industry. These imported grains are used to feed some 55 million pigs.

Jaume Bernis, a 58-year-old farmer with 1,200 pigs on his farm in northeastern Spain, fears the war will further aggravate the suffering his business faces from climate change and drought.

Since October, Spanish pork products have suffered losses due to high costs, Bernis said. These costs are due to China stockpiling feed for its pigs as it fights its way through a devastating outbreak of African swine fever.

In the first two days of the Russian assault on Ukraine, the price of grain for animal feed jumped 10% on the open market in Spain.

“We are facing a moment of very high costs, and we don’t know what lies ahead,” Bernis said. “That’s another cost of fighting a war in the 21st century.”


Batrawy reported from Dubai, Magdy from Cairo and Asadu from Lagos, Nigeria. AP reporter Paul Wiseman in Washington; Qassim Abdul-Zahra in Baghdad; Cara Anna in Nairobi, Kenya; Niniek Karmini in Jakarta, Indonesia; and Roxana Hegeman in Belle Plaine, Kansas, contributed.


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