GLOBAL FOOD CRISIS LOOMS
June 23, 2022
UKRAINE STRUGGLES TO EXPORT ITS GRAIN AFTER RUSSIAN INVASION
The Russian invasion of Ukraine, now in its fourth month, is preventing grain from leaving the "breadbasket of the world" and making food more expensive across the globe.
Russian forces' blockade of Ukrainian ports, destruction and alleged theft of the country's grains and agricultural machinery, and shells and mines now strewn across its fields are threatening to worsen shortages, hunger and political instability in developing countries.
Weeks of negotiations on safe corridors to get grain out of Ukraine's Black Sea ports have made little progress, with urgency rising as the summer harvest season arrives.
"This needs to happen in the next couple of months [or] it's going to be horrific,'' said Anna Nagurney, a Kyiv School of Economics board member. Nagurney said that 400 million people worldwide rely on Ukrainian food supplies.
Together, Russia and Ukraine export nearly a third of the world's wheat and barley, more than 70% of its sunflower oil and are prominent suppliers of corn. Russia is the top global fertiliser producer.
The war made the already-climbing world food prices skyrocket by preventing some 20 million tonnes of Ukrainian grain from reaching the Middle East, North Africa and parts of Asia.
Up to 181 million people in 41 countries could face a food crisis or even outright famine, UN projections show.
Costs go up as Ukraine seeks alternative export routes
Typically, 90% of wheat and other grain from Ukraine's fields are shipped to world markets by sea. However, Russian blockades of the Black Sea coast have held up most of the country's exports. Some grain is being rerouted through Europe by rail, road and river, but the amount is minimal compared to sea routes. Additionally, the shipments are running behind because Ukraine's rail gauges do not match those of its neighbours to the west.
Ukraine's Deputy Agriculture Minister, Markian Dmytrasevych, asked European Union lawmakers to help export more grain, including expanding the use of a Romanian port on the Black Sea, building more cargo terminals on the Danube River, and cutting red tape for freight crossing at the Polish border. But that means food is even farther from those that need it.
"Now you have to go all the way around Europe to come back into the Mediterranean. It really has added an incredible amount of cost to Ukrainian grain,'' Senior Research Fellow at the International Food Policy Research Institute in Washington Joseph Glauber said.
Ukraine has only been able to export 1.5 million to 2 million tonnes of grain a month since the war, down from more than 6 million tonnes, said Glauber, a former chief economist at the US Department of Agriculture.
Russian grain is also not getting out. Moscow argues that Western sanctions on its banking and shipping industries make it impossible for Russia to export food and fertiliser, scaring off foreign shipping companies from carrying it. Russian officials insist sanctions must be lifted to get grain to global markets.
European Commission President, Ursula von der Leyen, and other Western leaders said that sanctions do not affect food.
Russia rejects 'abuse' of naval advantage and accusations of crops destruction and theft
Ukraine has accused Russia of shelling agricultural infrastructure, burning fields, stealing grain and trying to sell it to Syria after Lebanon and Egypt refused to buy it. Satellite images taken in late May by Maxar Technologies show Russian-flagged ships in a port in Crimea being loaded with grain and then days later docked in Syria with their hatches open.
Ukrainian President, Volodymyr Zelenskyy, claimed Russia provoked a global food crisis. The West agrees, with officials like European Council President Charles Michel and US Secretary of State Antony Blinken saying Russia is weaponising food.
Russia says exports can resume once Ukraine removes mines in the Black Sea and arriving ships can be checked for weapons in an attempt to prevent Western arms donations from reaching the country. Russian Foreign Minister Sergey Lavrov promised that Moscow would not "abuse" its naval advantage and would "take all necessary steps to ensure that the ships can leave there freely."
Ukrainian and Western officials doubt the pledge. Turkish Foreign Minister Mevlüt Çavuşoğlu this week said that it might be possible to create secure corridors without the need to clear sea mines because the location of the explosive devices is known.
But other questions remain, such as whether insurers would provide coverage for ships sailing through a warzone.
Dmytrasevych told the EU agriculture ministers this week that the only solution is defeating Russia and unblocking ports. "No other temporary measures, such as humanitarian corridors, will address the issue," he said.
'Catastrophic' starvation and famine will affect millions
Food prices were already rising, before the invasion, due to factors including bad weather and poor harvests cutting supplies, while global demand rebounded strongly from the COVID-19 pandemic. Glauber cited poor wheat harvests last year in the US and Canada and a drought that hurt soybean yields in Brazil. Also exacerbated by climate change, the Horn of Africa is facing one of its worst droughts in four decades, while a record-shattering heat wave in India in March reduced wheat yields. That, along with soaring costs for fuel and fertiliser, has prevented other big grain-producing countries from filling in the gaps.
Ukraine and Russia mainly export staples to developing countries most vulnerable to cost hikes and shortages. Countries like Somalia, Libya, Lebanon, Egypt and Sudan rely heavily on wheat, corn and sunflower oil from the two warring nations.
"The burden is being shouldered by the very poor," Glauber said. "That's a humanitarian crisis, no question.'' Besides the threat of hunger, spiralling food prices risk political instability in such countries. They were one of the causes of the Arab Spring, and there are worries of a repeat.
The governments of developing countries must either let food prices rise or subsidise costs, Glauber said. A moderately prosperous country like Egypt, the world's top wheat importer, can afford to absorb higher food costs, he said.
"For poor countries, like Yemen or countries in the Horn of Africa - they're really going to need humanitarian aid," he added.
Starvation and famine are plaguing that part of Africa. Prices for staples like wheat and cooking oil are more than doubling in some cases, while millions of livestock that families use for milk and meat have died. In Sudan and Yemen, the Russia-Ukraine conflict came on top of years of domestic conflict.
UNICEF warned about an "explosion of child deaths" if the world focuses only on the war in Ukraine and does not act. UN agencies estimated that more than 200,000 people in Somalia face "catastrophic hunger and starvation," roughly 18 million Sudanese could experience acute hunger by September, and 19 million Yemenis face food insecurity this year.
Wheat prices have risen in some countries by as much as 750%.
"Generally, everything has become expensive. Be it water, be it food, it's almost becoming quite impossible," Justus Liku, a food security adviser with the aid group CARE, said after visiting Somalia recently.
He said that a vendor selling cooked food had "no vegetables or animal products. No milk, no meat. The shopkeeper was telling us she's just there for the sake of being there."
In Lebanon, bakeries that used to have many types of flat bread now only sell basic white pita bread to conserve flour.
Europe urged not to neglect other refugees amid focus on Ukraine
"We are facing a great famine” PM of Slovakia said about blocked seaports on the Black Sea.
A recent International Rescue Committee (IRC) report has estimated that an additional 47 million people are projected to experience acute hunger this year, with countries in Central America and the Caribbean - already suffering from the economic impacts of COVID-19, increasing conflict and natural disasters - also seeing food prices well above the five-year average.
IRC President David Milliband said that "millions are being doubly punished as life-saving supplies are held hostage."
"The war in Ukraine and its knock-on effects on other humanitarian contexts cannot be underestimated, and are a tragic representation of the system failure of the international community to address and prevent humanitarian suffering," he said.
Other major human rights and humanitarian NGOs have warned Europe that this might cause a large wave of immigration to the richer countries in the West, especially from countries where citizens are at risk of violence, conflict and persecution.
Storage capacities also under threat
For weeks, UN Secretary-General, Antonio Guterres, has been trying to secure an agreement to unblock Russian exports of grain and fertiliser and allow Ukraine to ship commodities from the key port of Odesa. But progress has been slow.
In the meantime, a vast amount of grain is stuck in Ukrainian silos or on farms. And there's more coming - Ukraine's winter wheat harvest is getting underway soon, putting more stress on storage facilities even as some fields are likely to go unharvested because of the fighting. Ukrainian farmers also have to contend with unexploded ordnance and mines and risk their lives to do their work.
European countries are working with the US on a plan to build temporary silos on Ukraine's borders, including in Poland - a solution that would also address the different rail gauges between Ukraine and Europe.
The idea is that grain can be transferred into the silos and then "into cars in Europe and get it out to the ocean and get it across the world. But it's taking time," US President Joe Biden said in a speech recently.
Dmytrasevych said Ukraine's grain storage capacity was reduced by 15 million to 60 million tonnes after Russian troops destroyed silos or occupied sites in the south and east.
Food prices skyrocket
World production of wheat, rice and other grains is expected to reach 2.78 billion tonnes in 2022, down 16 million tonnes from the previous year - the first decline in four years, the UN Food and Agriculture Organisation, FAO, said.
Wheat prices are up 45% in the first three months of the year compared with 2021, according to the FAO's wheat price index. Vegetable oil has jumped 41%, while sugar, meat, milk and fish prices also rose by double digits.
The increases are fuelling faster inflation worldwide, making staples more expensive and raising costs for restaurant owners, who have been forced to increase prices.
Some countries are reacting by trying to protect domestic supplies. India has restricted sugar and wheat exports, while Malaysia halted exports of live chickens, alarming Singapore, which gets a third of its poultry from its neighbour.
The International Food Policy Research Institute said food shortages growing more acute as the war drags on could lead to more export restrictions that further push up prices.
Another threat is scarce and costly fertiliser, meaning fields could be less productive as farmers skimp, said Steve Mathews of Gro Intelligence, an agriculture data and analytics company.
There are especially big shortages of two of the main chemicals in fertiliser, of which Russia is a major supplier, together with Belarus, whose regime is also under Western sanctions due to President Alexander Lukashenko's support of the Russian invasion of its neighbour.
"If we continue to have the shortage of potassium and phosphate that we have right now, we will see falling yields," Mathews said. "No question about it in the coming years."