By Eric Vandenbroeck and co-workers

The war about food supplies

The World Food Programme (WFP) calls for the immediate reopening of Black Sea ports – including Odesa – so that critical food from Ukraine can reach people facing food insecurity in countries like Afghanistan, Ethiopia, South Sudan, Syria, and Yemen, where millions are on the brink. 

“Right now, Ukraine’s grain silos are full. At the same time, 44 million people worldwide are marching towards starvation,” said David Beasley, Executive Director of the World Food Programme. 

The UN’s food and agricultural price index reached about 160 points in March before falling 1.2 or 0.8% in April. Cereal and meat price indices hit record highs in March. Wheat was trading in Chicago at US$674c per bushel. Today it fetches US1,242c per bushel.

UN secretary-general António Guterres said shortages of grain and fertilizer caused by the war, warming temperatures, and pandemic-driven supply problems threaten to “tip tens of millions of people over the edge into food insecurity,” as financial markets saw share prices fall heavily again on fears of inflation and a worldwide recession.

US Secretary of State Antony Blinken has accused Russia of weaponizing food and holding grain for millions of people around the world hostage to help “break the spirit of the Ukrainian people.”

“As a result of the Russian government’s actions, some 20 million tonnes of grain sit unused in Ukrainian silos as global food supplies dwindle, prices skyrocket, causing more around the world to experience food insecurity,” Blinken said.

Accordingly, by invading ukraine, Vladimir Putin will destroy the lives of people far from the battlefield and on a scale that even he may regret. The war is battering a global food system weakened by covid-19, climate change, and an energy shock. Ukraine’s exports of grain and oilseeds have mostly stopped, and Russia’s are threatened. Together, the two countries supply 12% of traded calories. Wheat prices, up 53% since the start of the year, jumped a further 6% on 16 May, after India said it would suspend exports because of an alarming heatwave.

The widely accepted idea of a cost-of-living crisis does not begin to capture the gravity of what may lie ahead. António Guterres, the un secretary-general, warned on 18 May that the coming months threaten “the specter of a global food shortage” that could last for years. The high cost of staple foods has already raised the number of people who cannot be sure of getting enough to eat by 440m, to 1.6bn. Nearly 250m are on the brink of famine. If, as is likely, the war drags on, and supplies from Russia and Ukraine are limited, hundreds of millions more people could fall into poverty. Political unrest will spread, children will be stunted, and people will starve.

Russia and Ukraine supply 28% of globally traded wheat, 29% of the barley, 15% of the maize, and 75% of the sunflower oil. Russia and Ukraine contribute about half the cereals imported by Lebanon and Tunisia; for Libya and Egypt, the figure is two-thirds. Ukraine’s food exports provide the calories to feed 400m people. The war is disrupting these supplies because Ukraine has mined its waters to deter an assault, and Russia is blockading the port of Odesa.

The Russian navy has established a blockade of Ukraine's Black Sea Coast:

Before the invasion, the World Food Programme warned that 2022 would be a terrible year. China, the largest wheat producer, has said that this crop may be its worst ever after rains delayed planting last year. In addition to India’s extreme temperatures, the world’s second-largest producer, a lack of rain threatens to sap yields in other breadbaskets, from America’s wheat belt to the Beauce region of France. The Horn of Africa is being ravaged by its worst drought in four decades. Welcome to the era of climate change.

All this will have an unfortunate effect on the poor. Households in emerging economies spend 25% of their budgets on food, and in sub-Saharan Africa, 40%. Bread provides 30% of all calories. Many importing countries cannot afford subsidies to increase the help to the poor.

Afghanistan: A family collects their rations at a food distribution point

The crisis threatens to get worse. Ukraine had already shipped much of last summer’s crop before the war. Russia is still managing to sell its grain, despite added costs and risks for shippers. However, those Ukrainian silos undamaged by the fighting are full of corn and barley. Farmers have nowhere to store their next harvest due to starting in late June, which may rot. And they lack the fuel and labor to plant the one after that. Russia, for its part, may lack some supplies of the seeds and pesticides it usually buys from the European Union.

Despite soaring grain prices, farmers elsewhere may not make up the shortfall. One reason is that prices are volatile. Worse, profit margins are shrinking because of the surging prices of fertilizer and energy. These are farmers’ main costs, and both markets are disrupted by sanctions and the scramble for natural gas. If farmers cut back on fertilizer, global yields will be lower at just the wrong time.

"Russia has launched a grain war, stoking a global food crisis," Berlin's top diplomat said. "It is doing so at a time when millions are already being threatened by hunger, particularly in the Middle East and Africa."

         

The UN says around 20 million tonnes of grain are currently stuck in Ukraine:

The response from worried politicians could make a bad situation worse. Since the war started, 23 countries have declared severe restrictions on food exports that cover 10% of globally traded calories. If trade stops, famine will ensue.

The scene is set for a blame game, in which the West condemns Putin for invading, and Russia decries Western sanctions. The disruptions are due to Putin’s invasion, and some sanctions have exacerbated them.

Instead, states need to act together, starting by keeping markets open. This week Indonesia, the source of 60% of the world’s palm oil, lifted a temporary ban on exports. Europe should help Ukraine ship its grain via rail and road to ports in Romania or the Baltics, though the most optimistic forecasts say that just 20% of the harvest could get out that way. Importing countries need support, too, so enormous bills do not capsize them. Emergency supplies of grain should go only to the very poorest. For others, import financing on favorable terms, perhaps provided through the imf, would allow donors’ dollars to go further. Debt relief may also help to free up vital resources.

There is scope for substitution. About 10% of all grains are used to make biofuel, and 18% of vegetable oils go to biodiesel. Finland and Croatia have weakened mandates that require petrol to include fuel from crops. Others should follow their lead. An enormous amount of grain is used to feed animals. According to the Food and Agriculture Organisation, grain accounts for 13% of cattle dry feed. In 2021 China imported 28m tonnes of corn to feed its pigs, more than Ukraine exports in a year.

 

Working on making a change

Immediate relief would come from breaking the Black Sea blockade. Roughly 25m tonnes of corn and wheat, equivalent to the annual consumption of all of the world’s least developed economies, is trapped in Ukraine. Three countries must be brought onside: Russia needs to allow Ukrainian shipping; Ukraine has to de-mine the approach to Odesa, and Turkey needs to let naval escorts through the Bosporus.

That will not be easy. Russia, struggling on the battlefield, is trying to strangle Ukraine’s economy. Ukraine is reluctant to clear its mines. Persuading them to relent will be a task for countries, including India and China, that have sat out the war. Convoys may require armed escorts endorsed by a broad coalition. Feeding a fragile world is everyone’s business. 

The White House is working to put advanced anti-ship missiles in the hands of Ukrainian fighters to help defeat Russia’s naval blockade, officials said, amid concerns, that more powerful weapons that could sink Russian warships would intensify the conflict.

But several issues are keeping Ukraine from receiving the missiles. For one, there is limited availability of platforms to launch Harpoons from shore -- a technically challenging solution according to several officials -- as it is primarily a sea-based missile.

Two US officials said the United States was working on potential solutions to pull a launcher off a US ship. According to experts and industry executives, both missiles cost about $1.5 million per round.

Bryan Clark, a naval expert at the Hudson Institute, said 12 to 24 anti-ship missiles like the Harpoon with ranges over 100 km would be enough to threaten Russian ships and could convince Moscow to lift the blockade. “If Putin persists, Ukraine could take out the largest Russian ships since they have nowhere to hide in the Black Sea,” Clark said.

Serhii Dvornyk, a member of Ukraine’s mission to the UN, backed Blinken’s claim and called on Russia to stop “stealing” Ukrainian grain and unblock the ports, noting that 400 million people around the world depended on grain from Ukraine. The country’s grain exports fell from 5m tons a month before Russia’s February invasion to 200,000 tons in March and about 1.1m tons in April, he added.

Today also, the European Commission published a decision to gather monthly data on levels of stocks in the EU of cereals, oilseeds, and rice. This is a direct follow-up of the Communication on “safeguarding food security and reinforcing the resilience of food systems” presented on 23 March. The aim is to better monitor stock levels in the current environment of high prices and perceived uncertainty about supplies.

 

 

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