The looming catastrophe with the global food shortage

Wheat harvest. Vincent Mundy / Bloomberg via Getty Images

Russia’s war against Ukraine has caused food prices to rise, leaving millions at risk of going hungry. Here’s everything you need to know:

Why food shortages?

The Russian invasion and the sanctions against Moscow that followed have dramatically reduced crop and fertilizer production in Russia and Ukraine, driving vulnerable areas in the Middle East and Africa to the brink of famine. The two major countries are both major producers of wheat, maize and barley, while Russia and Belarus produce much of the world’s fertilizer. The prices of these goods had already been rising due to global inflation and shortages caused by COVID-19, as well as the rise in gas prices that increased the cost of shipping. Now the war has made virtually every component of the global supply chain far more expensive. Supermarket prices are expected to rise by as much as 20 percent, while at least 44 million people are at risk of famine. For them, war is “a disaster on top of a disaster,” said David Beasley, executive director of the United Nations World Food Program. “We would never have dreamed if something similar would be possible.”

Are Russia and Ukraine still exporting food?

Many Ukrainian farmers have gone to the front lines to fight, and the farms they left are being ravaged by Russian shelling. This means that Ukraine’s spring harvest of barley, maize and other crops – which is expected to be a strong season before the war – will be less than half the 2021 level, says the Ministry of Agriculture. Ukraine banned the export of wheat and other foodstuffs last month to secure its own war supplies, but at present it can not really export anyway: Russian warships are blocking access to its Black Sea ports and have bombed at least three civilian ships carrying Ukrainian goods. Ukrainian farmers are also likely to miss their upcoming planting season, and those still in the fields have scrapped export crops in favor of food that can be quickly harvested to feed civilians and soldiers. Russia’s own ability to export has meanwhile been hampered by sanctions.

Can not lose the food?

While the two countries generate about 30 percent of the world’s exported wheat, it is still less than 1 percent of the world’s total wheat – and other producers, such as India, grew more wheat last autumn in anticipation of a Black Sea conflict. But it takes time for recipient countries to rearrange their supply chains and place orders with new sources. And the supply of labor to deliver these orders is becoming scarce, as Russians and Ukrainians together make up about 15 percent of the world’s shipping workforce. Panic investors have caused wheat prices to rise by as much as 50 percent, and civilians have resorted to hoarding, especially in Arab countries that depend on imports for staple foods. These countries are already rationing. Egypt, which relies on Ukraine and Russia for about 85 percent of its wheat imports, has now set the price of bread, while Tunisia is restricting sales of semolina used in couscous.

How bad will it get?

Arab countries fear the worst. They recall that the high food prices during the Great Recession were a major factor in the protests of the Arab Spring that erupted a few years later. In conflict-ridden Yemen, 31,000 people are already facing famine, and that number could increase fivefold this year. But the pain will be felt everywhere. European supermarkets lack flour and sunflower oil, while Indonesia is almost out of its beloved Indomie instant noodles, made with Ukrainian wheat. Cameroon’s bakeries are looking for long queues for bread. Somalia is facing its worst drought in decades, but cannot turn to Egyptian imports to make up the difference. “From Mogadishu to Moscow,” said Abdullahi Nur Osman, executive director of the Somali charity Hormuud Salaam, “the world is deeply connected.”

Why is fertilizer more expensive?

Russia and Belarus are major exporters of potassium chloride, ammonia, urea and other important fertilizer components used throughout Iowa to Zimbabwe. Before the war, the United States had already sanctioned Belarusian potash for dictator Alexander Lukashenko’s human rights abuses, and Europe has now followed suit. When Russia blocked its own fertilizer exports last month, farmers around the world began distorting, cutting back on planting and switching to fertilizer. “It’s just a kind of shock to the grain system,” said Mike Carstensen, a wheat farmer in Washington state. “It’s not all rosy down in the yard.” Brazil, the world’s largest producer of coffee, soybeans and sugar, imports nearly 30 percent of its fertilizer from Russia and Belarus and is now considering opening protected indigenous lands for potash operation.

What can be done?

The Biden administration said it is in talks with Canada and European countries to send more food aid to hungry countries and help farmers increase crop yields. France is considering food stamps for its citizens, while the UK has cut gas and diesel taxes to ease supply pressures. China, meanwhile, has bought up US soybeans, corn and other supplies. But each country’s vulnerability to price shocks will be unique, said Derek Headey, a senior researcher at the International Food Policy Research Institute, and the complexity of the global supply chain makes it difficult to determine whether a particular price is rising due to the war or the pandemic or a other reason. “We thought 2007-08 was a perfect storm,” he said. “This one seems like a more perfect storm.”

Agricultural equipment in danger

The war also exacerbates a global shortage of semiconductor chips. It also means bad news for food supplies, because virtually all modern agricultural equipment – from combine harvesters to tractors to planters – relies on semiconductors. Ukraine produces half of the world’s neon, a critical component of semiconductor chips, and almost all of that production has been discontinued. One of Ukraine’s two largest neon manufacturers, Ingas, is based in the southern port city of Mariupol, which has been under relentless Russian siege and bombing for more than a month. The other, Cryoin, is in Odessa, which is suffering from air strikes and preparing for the worse. While the US plans to invest billions in domestic chip production, it will not get far without a supply of neon.

This article was first published in the latest issue of The week magazine. If you want to read more like it, try six risk-free issues of the magazine here

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