A global food crisis…

The Ukraine war is causing to unleash an unprecedented food crisis. The United Nations secretary-general is warning food challenges could last for months, and possibly for years. It warns of cost-of-living challenges that have not been seen in more than a generation. Price shocks are escalating in the global food, fertiliser, and energy markets. Thus far, Ukraine is the fifth largest producer of wheat in the world. Furthermore, they are a major producer of maize, barley, and sunflower oil. So far, because of Russia’s naval blockade, the stockpiled supplies could not be shipped out of Ukraine’s Black Sea ports.

Thus far, the food shortage crisis goes wider than in Ukraine. It follows already high food prices due to COVID supply chain disruptions. The reduced yields because of droughts around the world last year compounds the issues.

Rising prices

Wheat prices had already risen by 50 percent in the international market before the war. Since the war, there has been a further 35 to 50 percent increase. Thus far, the first shock was the Chinese epidemic of swine flu. China is the largest pork producer in the world, and it wiped out a lot of pork. Hence, China had to import pork and grains to feed the pigs. 

Then there were extreme weather conditions like droughts and floods around the world. Hence, there were a series of bad harvests. Thus far, this is expected in most agricultural seasons. It is difficult to predict in agriculture. In this case, these events all happened at the same time. Further to this, there was COVID and disruptions linked to it. When lockdowns ended throughout the world logistics of the food supply chain were still disruptions by COVID in certain areas.

Wheat supplies

So far, these made a complex storm before the war started. Although Russia and Ukraine account for almost 30 percent of globally traded wheat supply. Hence, the issue today is that Ukraine’s share of the wheat cannot get out of Ukraine for export. It was rather fortunate a share of this volume of exports had already been exported. Normally the bulk of this normally happens early in the year. Thus far, it is estimated about 25 million tonnes of grain which comprise wheat and corn are stuck in Ukraine. Now it can’t get out.

So far, this is the start of the issues. It is so because the next harvest is due to begin in June, and July and move into August. The storage facilities are nearly full. Hence, there are harvest risks.

Ukraine’s blockade

The blockade is one of many of Ukraine’s challenges in the chain. So far, farmers experience a shortage of seeds, pesticides, workers, and petrol to operate machinery and vehicles. In many farming regions about 50 to 60 percent are the regions where fighting has either occurred or occurred. Hence, as a result, farmers in some areas may have to plant at night to avoid air raids. Thus far, other fields are not exploitable at present. In fact, all the fields contain exploded devices. So, it is dangerous to grow, plant or work on them.

In the meantime, Russia manages to export most of its grains. However, they face difficulties in the operations and logistics costs. So, it is much harder to find insurance for ships. Hence, the ship owners are not happy for their ships to export the grain.

Expensive exports

So far, the export systems Russia use is more complex to operate. It increases the prices for the countries that buy from them too. Furthermore, additional sanctions on Russia are causing flow-on effects for seeds and pesticide imports. Hence, in turn, it impacts on the production of the global supply of staples. So, to mitigate these issues, some countries resort to protectionist measures like export controls. Thus, it triggers a vicious cycle. It mostly results in higher food prices. Hence, there is food inflation across the board. It worsens by these reactions and export controls.

Industry transparency

Having transparency in the industry would help these reactions. It would give countries confidence to sustain a blow. For example, in other industries such as energy and gas, data is widely available. Hence, it is much easier to track the current happenings.

Thus far, in the global food system, the stock is notorious to be opaque in many countries. Perhaps we need to eat less meat because animals that produce meat are eating grains. Thus, they eat much more grain than if we were consuming the grain direction in the first place.

So, without a doubt, the best solution may be for the war in Ukraine to cease. Other options would be to find other routes to export Ukraine’s grains or to find alternatives of grain feed for animals. It is crucial that we work on all these levels.