Ukraine is a significant producer and exporter of key agricultural products. With its industry paralysed because of the war, the world is facing a potential food crisis with supplies of staples such as wheat, maize and sunflower oil under threat.
1. Food crisis
The conflict in Ukraine is exacerbating food prices worldwide, as these were already inflated following the effects of the pandemic and a near-total paralysation of society early in 2020. Maximo Torero, the chief economist at the Food Agriculture Organization (FAO) said the current situation could “put us in a situation where we could easily fall into a food crisis.”
In 2021, Ukraine exported more than €24 billion in agricultural products to the world. Ukraine’s top export markets were the 27 nations that now comprise the EU at €6.8 billion, China at €3.7 billion, India at €1.7 billion, Egypt at €1.3 billion and Turkey also at €1.3 billion.
Before the war, Ukraine supplied 12% of global wheat and it was the biggest producer of sunflower oil. The country managed to export about two-thirds of its wheat before Russian’s invasion. The rest is now blocked with farmers likely unable to continue with Spring planting, or take in grain harvests in the Summer.
According to the EU Vegetable Oil and Protein Meal Industry (FEDIOL), the umbrella association that supply the food industry, Ukraine exports about 60 million tonnes of grain to the world. It was expected in the current marketing year that the country would export about 33 million tonnes of corn and 24 million tonnes of wheat. Maize represents the main imported product from Ukraine to Europe with a yearly average of 11 million tonnes. Other commodities, such as sunflower oil represent about 2 million tonnes.
2. Record-high prices
According to the FAO, food prices have been rising since the second half of 2020 and reached an all-time high in February 2022, after wheat and barley prices rose by nearly a third. Rapeseed and sunflower oil also rose by more than 60% during 2021. As for fertilizers, the price of urea, a key nitrogen fertiliser, has more than tripled in the past year due to rising energy prices.
FEDIOL said the situation in Ukraine would have important consequences on European supplies of sunflower seed oils: “Approximately 200.000 tonnes per month supply has stopped being shipped to European ports,” stated FEDIOL on 4 March, noting that the availability of stocks is estimated to last between 4 and 6 weeks.
3. Developing countries
Russia and Ukraine are responsible for the exportation of 30% or more of their wheat supply to at least 50 countries. The most reliant, however, are many developing countries in northern Africa and Asia.
My greatest fear is that the conflict continues – then we will have a situation of significant levels of food price rises in poor countries that were already in an extremely weak financial situation owing to Covid-19. The number of chronically hungry people will grow significantly, if that is the case.
Maximo Torero, chief economist at the Food Agriculture Organization
We are in an extremely problematic situation, whose trajectory remains uncertain. Russia and Ukraine account for 30% of the global grain exports. And countries that rely heavily on them have outstanding imports. My interview with @CGTNEurope https://t.co/XdbaC3NQtF
— Maximo Torero (@MaximoTorero) March 15, 2022
Aid agencies aren’t very likely to provide an immediate response to the crisis. “We plan our procurement months in advance, so we’re not looking at immediate impacts of our other operations, but price increases we feel right away, transport costs we feel,” said Jordan Cox, head of communications for the UN World Food Programme, which has branded 2022 “a year of catastrophic hunger.”
