The war in Ukraine will affect poor grain-importing countries


ROME – Poorer countries in North Africa, Asia and the Middle East that rely heavily on wheat imports are at risk of significant food insecurity due to Russia’s war in Ukraine, and the conflict is poised to drive up already skyrocketing food prices across much of the world, according to the UN food agency warned on Friday.

Ukraine and Russia, which face heavy economic sanctions for invading its neighbor two weeks ago, account for a third of global grain exports.

With the intensity and duration of the conflict uncertain, “likely disruptions to the agricultural activities of these two major commodity exporters could seriously aggravate food insecurity around the world, as international food and input prices are already high and vulnerable,” said Qu Dongyu, general manager. of the Rome-based Food and Agriculture Organization.

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The United Nations agency, known as the FAO, also noted that Russia is the main fertilizer producer and that a key component of fertilizer – urea – has more than tripled in price over the past of the last 12 months.

Uncertainty over whether Ukrainian farmers will be able to harvest ready wheat in June is also concerning, Qu said in a statement. In Ukraine, “massive population displacements have reduced the number of laborers and agricultural workers. Access to agricultural fields would be difficult,” noted Qu.

Even if they could, Ukraine’s Black Sea ports are closed and its government this week banned the export of wheat, oats, millet, buckwheat and some other foodstuffs to prevent a crisis in its own country and stabilize the market.

Ukraine’s ban does not apply to its main global exports of corn and sunflower oil. It and Russia together account for 52% of the global sunflower oil export market. They also represent 19% of the world supply of barley, 14% of wheat and 4% of corn.

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“It is still unclear whether (other) exporters would be able to fill this void,” Qu said, warning that wheat stocks are already low in Canada.

The United States, Argentina and other wheat producing countries should limit their exports as governments seek to ensure domestic supplies, he said.

Adding to the pressure, countries dependent on wheat from Russia and Ukraine will likely increase their import levels. Egypt, Turkey, Bangladesh and Iran buy 60% of their wheat from Russia and Ukraine. Lebanon, Tunisia, Yemen, Libya and Pakistan are also heavily dependent on wheat exports from these two countries.

“Supply chain and logistics disruptions to Ukrainian and Russian grain and oilseed production and restrictions on exports from Russia will have a significant impact on food security,” Qu said.

The FAO has warned that if the conflict triggers a “sudden and prolonged reduction” in food exports from Ukraine and Russia, it could further increase pressure on international commodity prices “to the detriment of economically vulnerable countries”.

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The UN agency said its simulations suggest that “the global number of undernourished people could increase by 8 to 13 million” in 2022-2023, notably in Asia, sub-Saharan Africa, the Middle East and North Africa. .

The potential for unrest could increase with prices.

Mohammed Jassim, owner of a small bakery in Baghdad, said there was real concern in Iraq, where dozens of people demonstrated last week against soaring food prices.

“I’m a consumer buying necessities for my business, and I’ve seen about a 20% increase in the price of sugar and wheat,” he said. “Of course, this increase means that I will have to increase the price of my products. So far I haven’t increased the prices as I absorb the price difference. But if this continues, then I will be forced to raise my prices, and ultimately the average citizen will be the one to pay the price.

Meanwhile, alternative sources may only be able to partially compensate for grain and sunflower seed export shortfalls by Ukraine and Russia, the FAO said.

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“Worryingly, the resulting global supply shortfall could drive international food and feed prices up to 8-22% above their already high levels,” the FAO report said.

According to FAO figures, food prices hit a record high in February. The COVID-19 pandemic has already had a major impact on global food security, Qu said.

Last year, world wheat and barley prices rose by 31% and rapeseed and sunflower oil prices jumped by more than 60%. Wheat prices jumped more than 50% from a week before the invasion.

Some consumers are already feeling the effects of lower exports as well as high prices. In Italy, supermarkets in Tuscany and Sardinia are limiting sunflower oil sales to two containers per customer, Italian public television said. Spanish supermarkets also ration it.

While the Italian diet is associated with olive oil, sunflower oil is used commercially to produce mayonnaise, sauces, and some processed foods. Italian importers of seeds for processing into oil say their supply has already dried up.

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Associated Press reporter Qassim Abdul-Zahra contributed from Baghdad, Iraq.

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