Monday, March 07, 2022

Who will harvest the fields?

 Russia and Ukraine combined provides nearly a third of the world’s wheat and barley exports.

Ukraine possesses vast, fertile farmlands and was known as the “breadbasket of the world.”

Ukrainian farmers have been forced to neglect their fields as millions flee, fight or try to stay alive. Ports are shut down that send wheat and other food staples worldwide to be made into bread, noodles and animal feed. 

And there are worries Russia, another agricultural powerhouse, could have its grain exports blocked by the enforcement of banking sanctions.

wheat supplies, prices have surged 55% since a week before the invasion amid concerns about what could happen next. If the war is prolonged, countries that rely on affordable wheat exports from Ukraine could face shortages starting in July, International Grains Council director Arnaud Petit told The Associated Press.

That could create food insecurity and throw more people into poverty in places like Egypt and Lebanon, where diets are dominated by government-subsidized bread. A prolonged conflict would have a big impact in Egypt, the world’s largest wheat importer. Millions rely on subsidized bread made from Ukrainian grains to survive, with about a third of people living in poverty.

Egypt’s state procurer of wheat, which normally buys heavily from Russia and Ukraine, had to cancel two orders in less than a week: one for overpricing, the other because a lack of companies offered to sell their supplies. Sharp spikes in the cost of wheat globally could severely affect Egypt’s ability to keep bread prices at their current subsidized level.

“Bread is extremely heavily subsidized in Egypt, and successive governments have found that cuts to those subsidies are the one straw that should be kept off the camel’s back at all costs,” Mirette Mabrouk, a senior fellow at the Middle East Institute, wrote in a recent analysis.

 In Europe, officials are preparing for potential shortages of products from Ukraine and increased prices for livestock feed that could mean more expensive meat and dairy if farmers are forced to pass along costs to customers. Ukraine supplies the EU with just under 60% of its corn and nearly half of a key component in the grains needed to feed livestock. Spain is feeling the pinch both in sunflower oil, which supermarkets are rationing, and grains for the all-important breeding industry. Those imported grains go to feed some 55 million pigs.

 Syria recently announced it would cut spending and ration staples. In nearby Lebanon, where a massive explosion at the Beirut port in 2020 destroyed the country’s main grain silos, authorities are scrambling to make up for a predicted wheat shortage, with Ukraine providing 60% of its supply. 

Even before the war threatened to affect wheat supplies in sub-Saharan Africa, people in Kenya were demanding #lowerfoodprices on social media as inflation eroded their spending power. Now, they’re bracing for worse.

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

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

“All of us need to look elsewhere” in the future, said Tope Ogun with Honeywell Flour Mills Plc, one of Nigeria’s biggest flour milling companies. “We might not get what we need to, and there is likely going to be an increase in the price.”

The disruption can be felt as far away as Indonesia, where wheat is used to make instant noodles, bread, fried foods and snacks. Ukraine was Indonesia’s second-largest wheat supplier last year, providing 26% of wheat consumed. Rising prices for noodles, in turn, would hurt lower-income people, said Kasan Muhri, who heads the trade ministry’s research division.

Ukraine also is a major supplier of corn and the global leader in sunflower oil, used in food processing. 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 wholesale retailer in Baghdad, said he and other Iraqis are bracing to pay more for their cooking oil.

Anna Nagurney, a professor of supply chains, logistics and economics at the University of Massachusetts Amherst, said, “Wheat, corn, oils, barley, flour are extremely important to food security ... especially in the poorer parts of the globe.” She explained, with Ukrainian men being called on to fight, she said, “Who’s going to be doing the harvesting? Who’d be doing the transportation?”

Russian war in world's 'breadbasket' threatens food supply | AP News

1 comment:

ajohnstone said...

In Tunisia, like many people queueing for bread in Tunis’s sprawling medina, or old town, Khmaes Ammani, a day labourer, said the rising cost of living was leaving him squeezed. “There’s never any money at the end of the month,” he said. “I even have to borrow some. Everything is getting more expensive.”

Nearly half of Tunisia’s wheat imports come from Ukraine, and the Russian invasion has sent prices to a 14-year high. Even though the Tunisian state controls the price of bread, people fear they will inevitably feel the crunch.

“If the price of bread goes up, it’ll mean cutbacks elsewhere,” said Ammani. “We need the bread.”