FOOD CRISIS: Fears from Russia- Ukraine war Drives up cost of Wheat Globally
As the Russian army tightens its grip in Ukraine, fears grow of an unintended consequence of the war: a food-security crisis.
Some of the biggest – and hungriest – nations are dependent on shipments of grain from countries like Ukraine and Russia, which together account for a quarter of the world’s entire wheat exports.
The war has also sent fuel prices soaring, which will have an effect on the cost of producing and transporting food. Fertilizer, a critical component of agriculture, has also become more expensive.
One particularly vulnerable country is Egypt. A nation of over 100 million people, it spends $4 billion a year importing food to feed its population, and 70 per cent of its wheat demand comes from Ukraine and Russia.
The fact that exports from Ukraine are cut off entirely presents a terrifying dilemma for Egypt or Turkey, which also depends heavily on wheat from the region.
“This shortage really matters,” says Tymofiy Mylovanov, a former Minister of Economic Development, Trade and Agriculture of Ukraine. “There will be hunger in certain countries,” he told Global News.
As the world continues to endure the impact of the COVID-19 pandemic, a war in Europe is only adding to a sense of economic insecurity.
Stock markets have been on a rollercoaster ride in recent weeks, as investors grapple with the potential long-term economic consequences of Russia’s invasion of Ukraine.
In the past, disruptions to supplies have led to political instability in countries that are food insecure at the best of times, and experts fear that the same could happen as supplies from Ukraine and Russia are cut off.
The immediate impacts will be felt in the Middle East, Africa and Southeast Asia, says Mylovanov, who returned to Kyiv from the United States just days before Russia’s invasion, out of a sense of duty to his country.
Large countries like Egypt, he says, will start looking to other suppliers, and that will drive prices up for everyone.
“If you have five people to feed, and you have six pieces of bread, the price of bread is zero, because you have extra. But if you have four pieces, then the price of bread is everything they’ve got.”
“This shows that what happens in one part of the world has an impact on other parts of the world.”