Russia’s invasion of Ukraine could trigger “mass hunger and famine”, the UN has warned, after the World Bank pledged a further $12bn (£9.6bn) to ease its “devastating effects”.
UN Secretary General António Guterres told a UN meeting in New York on global food security that shortages of grain and fertiliser caused by the war threaten to “tip tens of millions of people over the edge into food insecurity”.
What will follow will be increases in “malnutrition, mass hunger and famine, in a crisis that could last for years”, he continued, adding that he is in “intense contact” with Russia and other countries to try to find a solution.
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His warning came as the World Bank boosted its funding for projects over the next 15 months to $30bn. The additional cash will help boost food and fertiliser production, facilitate greater trade and support vulnerable households and producers, it said.
‘Breadbasket of the world’
In late March, Guterres warned that the crisis in Ukraine, a country often described as “the breadbasket of the world”, would impact food supplies, saying there is a “sword of Damocles” hanging “over the global economy, especially in the developing world.
“We must do everything possible to avert a hurricane of hunger and a meltdown of the global food system,” he said at the time.
At least 50 countries rely on Russia and Ukraine for 30% or more of their wheat supply, including developing countries in North Africa, Asia and the near East, according to The Guardian.
Ukraine supplied 12% of global wheat before the conflict and was also the biggest producer of sunflower oil. Although about two-thirds of its wheat exports had been delivered before the invasion, “the rest is now blocked, and farmers may be unable to continue with spring planting, or take in grain harvests in the summer”.
And “the crisis goes deeper” still, the paper added. The war has pushed up prices for fertiliser, of which Ukraine and Russia were major exporters, as well as sending energy prices rocketing, further impacting agricultural production costs.
Russia has also limited its exports of barley, rye, wheat, maize, mixed grains, sugar and brown sugar because of economic sanctions placed on it by Western nations. The measures are intended to “ensure supplies for the domestic population”, with the limits set to remain in place until at least 30 June, Deutsche Welle reported.
Rising prices
Europe will probably be able to “weather the immediate storm”, said Politico. While farmers are “bracing for even higher costs of basic inputs like fertilisers and animal feed”, it remains unlikely that consumers will see “empty supermarket shelves”.
But the picture is “more alarming” in the developing world, the site added, especially in North Africa and the near East, which has already been “stricken by droughts” meaning there could be much higher prices for basics like bread.
Ukraine accounts for 80% of Lebanon’s wheat imports and is a leading supplier for countries including Somalia, Syria and Libya, reported the Financial Times (FT). Beirut is “struggling with an already high import bill and this is only going to make things worse”, James Swanston, an emerging markets economist at Capital Economics, said.
Turkey also relies on Russia for over 60% of its wheat imports and is already facing sky-high inflation. Some commentators have suggested that this trade relationship has dictated Turkey’s frosty response to Finland and Sweden’s applications for Nato membership.
“The war is only going to exacerbate the cost of food,” Ismail Kemaloglu, the former head of the state Turkish Grain Board, told the FT.
“What’s critical here is that the Black Sea offers a logistical and price advantage. Costs will rise significantly when [Turkey] buys from the US or Australia,” he warned. “Even if the war ends tomorrow, Ukraine’s planting season has already been disrupted and it will impact the 2022 harvest regardless.”
Political upheaval
High prices for food staples could ultimately “trigger unrest” around the globe, analysts warned the FT.
When wheat prices last spiked significantly in 2007 and 2008 it triggered protests in “nearly 40 countries from Haiti to the Ivory Coast”. An increase in grain prices is also considered to have been “one of the triggers” behind the outbreak of the Arab Spring.
It is also unclear how long the crisis will last, analysts have said, which in itself is raising prices. “The market is worried that this is not a problem that’s going to be solved any time soon,” said Tim Worledge at Agricensus, an agricultural data and pricing agency.
The UN’s Maximo Torero has urged countries to “share information on stocks, harvests and food availability” in order to “even out supply issues”, reported The Guardian.
“Right now, the short-term problem is availability. We need to find ways to fill the gap [in production caused by the war],” he told the paper. “We think the gap can be closed somewhat, but not 100%. Countries should also try to diversify their suppliers.”
