It’s the rising cost of energy that is dominating headlines at the moment, but there is another looming effect of the crisis in Ukraine – food prices. In a run-down of the world’s biggest wheat exporters, Russia is at number one, and Ukraine is at number five. Together they account for around a third of the world’s wheat exports. Ukraine is also the world’s fourth largest exporter of corn/maize, and a leading producer of vegetable oils.
The current assault on Ukraine puts this global food supply at risk. Though the country was expecting a record harvest this year, it’s hard to imagine that being delivered as planned. Already there have been disruptions to processors and to ports and infrastructure. Across the border, it’s not physical damage that will disrupt Russia’s exports, but the impact of sanctions. If Russia is excluded from international money transfers, those food exports will be compromised.
There are multiple knock-on effects of all of this. First of all, there are countries with established supply lines to Russia and Ukraine, regular customers for their grain. Some of the biggest importing countries are clustered in the Middle East and North Africa in particular. Egypt gets 70% of its wheat from Russia and Ukraine combined. Lebanon and Tunisia get over half their wheat from this part of the world, and Turkey is nearer three quarters and is particularly exposed.
History tells us that food prices are closely linked to political instability. Riots broke out in dozens of countries during the food price spike of 2007-2008. After falling back for a year, surging prices in 2010-2011 were a major contributor to the wave of unrest known as the Arab Spring. The upheaval of that time is still with us a decade later, having fed into the situations in Syria, Lebanon and Yemen.
Even if harvests aren’t disrupted as badly as some fear, the uncertainty itself is a problem. The consequences will be felt through prices, and the FAO’s Food Price Index hit record highs last month. It rose above 140 on the index for the first time, surpassing the highs seen in 2011. This has very real impacts for the world’s poorest countries, where people spend a much higher percentage of their incomes on food. Putin’s aggressions will have ripple effects well beyond continental Europe, and it’s going to be a hard year for many people.
In terms of what can be done about it, a briefing from the UN’s Food and Agriculture Organisation argues that supply lines for food and fertiliser need to be protected. (Russia is the world’s leading exporter of fertiliser, which is also consequential.) Crops and infrastructure need to be protected. They are also calling on countries not to bring in export restrictions – something that many governments do when food prices rise. It protects domestic consumers are the expense of even higher prices for everyone else, but it’s hard for governments to resist when there is pressure from their own citizens.
More locally, one urgent priority for the UK is to reverse cuts to international aid. As a rich nation we are well placed to respond to the overlapping humanitarian crises that are unfolding. In recent years we have been turning away from the needs of the world’s most vulnerable, and restoring aid budgets looks all the more important in this critical year.