Russia, Ukraine, and the Impact on the World's Food Supply | GLG (2024)

FAQs

How does war in Ukraine affect food supply in the world? ›

The global food supply is in a "tight market" in the coming year, especially as the war continues, Glauber said. Plantings in Ukraine are down 35% to 40%, meaning that one of the major exporters in the world is going to produce far less again this year, he said.

A leading exporter of grain, Ukraine has seen a dramatic drop in its exports, resulting in major food security concerns for millions of people around the world. Following the actions of the EU and the UN, exports have been growing and food prices have dropped.

Since the beginning of the war, wheat and maize prices have risen by 35%, while overall food prices have increased by 5% globally [20]. On average, in April 2022, the FFPI fell by 1.2 points (0.8%) from its all-time high in March 2022 but was still 29.8% higher than its value in April 2021.

Much of the world's wheat, corn and barley remains in Ukraine and Russia. An even larger portion of the global fertilizer supply—especially crucial for agriculture in soil-depleted countries—remains in Russia and Belarus.

Global food prices broke a record last year

The Food Price Index from the United Nations rose above its previous high in 2011 as Russia's war in Ukraine, the pandemic and extreme weather pushed up the price of agricultural products.

Food inflation: Cost of groceries rising at a slower rate

It was a bad year for food shortages in 2022, with categories including eggs and baby formula hit hard. Unfortunately, 2023 could see its own batches of food shortages.

Warring parties may plunder an enemy's food supply, deliberately destroying farms, livestock, and other civilian infrastructure. Conflict can cause food shortages and the severe disruption of economic activities, threatening the means of survival of entire populations.

The war – while not being the key factor explaining the slower-than-anticipated economic growth in 2022 and downgraded forecasts for 2023 – weighed negatively on global economic activity, adding to inflationary pressures worldwide and impeding the post-pandemic recovery.

This supply shortage has resulted in significant price increases. For example, in the first six months after the start of the conflict, natural gas prices rose by 120-130% and coal prices rose by 95-97%.

The combined effects of the pandemic and the conflict in Ukraine are expected to lead to a net increase of 75 to 95 million people in extreme poverty by the end of 2022, compared to pre-pandemic projections.

What impact did the Russian invasion of Ukraine have on agriculture? ›

The Russian invasion of Ukraine has sharply disrupted trade flows out of the Black Sea, as exports out of Ukraine ports were blocked, forcing traders in grains and other agricultural products to seek alternative (and more costly) export routes.

U.S. total imports of agricultural products from Ukraine totaled $143 million in 2019. Leading categories include: fruit & vegetable juices ($48 million), other vegetable oils ($31 million), snack foods ($12 million), other dairy products ($2 million), and processed fruit & vegetables ($918 thousand).

The fallout of the war has been widespread and devastating — feeding a hike in global prices, deepening hunger in countries as far flung as Lebanon, Sudan and Venezuela, and pushing the most precarious, like Somalia and Yemen — grappling with conflicts of their own — one step closer to a hunger catastrophe.

According to the European Commission, Ukraine accounts for 10% of the world wheat market, 15% of the corn market, and 13% of the barley market. With more than 50% of world trade, it is also the main player on the sunflower oil market.

Bread, pasta and cereals

Wheat is the key component of these everyday foods. Almost a third of the world's wheat is supplied by Russia and Ukraine, known as Europe's breadbasket. Ports are closed and infrastructure is in chaos, meaning different sources of this vital crop need to be found.

The U.S. is the world's top food exporter thanks to high crop yields and extensive agricultural infrastructure. Brazil is the world's fourth-largest food producer and second-largest importer; it is heavily dependent on imports by China.

Ukraine and Russia both play a major role in global food markets. They are net exporters of several of the leading cereal crops: wheat, maize (corn), and barley.

Every American should have at least a three-day supply of food and water stored in their home, with at least one gallon of water per person per day. If you have the space, experts recommend a week's supply of food and water. Choose foods that don't require refrigeration and are not high in salt.

What are three major reasons for food shortages worldwide? ›

Conflict, economic shocks, climate extremes and soaring fertilizer prices are combining to create a food crisis of unprecedented proportions. As many as 828 million people are unsure of where their next meal is coming from.

Ukraine has long played an important, yet sometimes overlooked, role in the global security order. Today, the country is on the front lines of a renewed great-power rivalry that many analysts say will dominate international relations in the decades ahead. Ukraine's Counteroffensive: Will It Retake Crimea?

In April 2022, Russia supplied 45% of EU's gas imports, earning $900 million a day. In the first two months after Russia invaded Ukraine, Russia earned $66.5 billion from fossil fuel exports, and the EU accounted for 71% of that trade.

War and inflation

In many circ*mstances, war can lead to inflation – which leads to loss of people's savings, rise in uncertainty and loss of confidence in the financial system.

Among the issues identified were the disruption of key supplies, supplier failures, low inventories, the use of single or sole source suppliers, the global shortage of commodities and raw material, the transportation problems at docks and depots and of course, labor shortages.

Together, the two countries accounted for about 25% of global exports of wheat and barley, about 15% of maize, and nearly 60% of sunflower seed oil in 2020. TABLE 1. Ukraine and Russia export values of grain and crop products in 2020. Source: United Nations Statistics Division (2022).

The war has impacted Ukraine's exports. Monthly exports fell from USD6 billion in January 2022 to USD2. 7 billion in March 2022. The impact of the grain deal and other land export routes has seen them grow to USD3.

While scholars universally agree that the cause of the famine was man-made, whether the Holodomor constitutes a genocide remains in dispute. Some historians conclude that the famine was planned and exacerbated by Joseph Stalin in order to eliminate a Ukrainian independence movement.

From analysis of potential impacts of the conflict on global wheat market under the general equilibrium trade model, we have found that the conflict would lead to a trade drop (60%), soaring wheat prices (50%), and severe food insecurity with decreased purchasing power for wheat (above 30%) in the most severe scenario, ...

How did the Russian war affect agriculture? ›

The war led to reduced access to ports, especially at the Sea of Azov, and an increase in export restrictions for key agricultural products, including cereals and sugar, and for certain nitrogen fertilisers.

Ukraine is normally the world's top producer of sunflower meal, oil, and seed and the world's top exporter of sunflower meal and oil. Sunflowers are sown in April and May, with harvest typically beginning in September.

The primary origin for US Wheat imports is Canada, representing ~ 81% of all US Wheat imports since 18, with 802 kmt.

U.S. total imports of agricultural products from Russia totaled $69 million in 2019. Leading categories include: snack foods ($8 million), tree nuts ($6 million), other vegetable oils ($3 million), essential oils ($3 million), and other dairy products ($2 million).

The top goods of Ukrainian exports to the USA in 2021 were: ferrous metals (56.2%) and articles (8.7%); ore, slag and ash (4.6%); fats and oils of animal origin (3.8%); electrical machinery (3.7%).

If Ukraine's farmers miss this planting season, too, already sky high prices for food will rise enough globally to trigger hunger in vulnerable populations all over the world and even more than the 8% inflation U.S. consumers are already facing.

To say Russia and Ukraine are critical to the world's food supply chain is an understatement. Together they export about 30% of the world's wheat, 60% of the world's sunflower oil (the third-most-traded seed oil behind palm and soy), and about 20% of the world's corn.

The United States is stepping up to buy about 150,000 metric tons of grain from Ukraine in the next few weeks for an upcoming shipment of food aid from ports no longer blockaded by war, the World Food Program chief has told The Associated Press.

That's why trade plays an important role to balance global supply and demand. In the 2020/21 season, Russia provided 52.32 million tons (7.8 percent) and Ukraine 69.82 million tons (11.3 percent) of cereals to the world.

Ukraine is one of the world's major grain producers. The country mainly grows and exports wheat, corn and barley. According to the European Commission, Ukraine accounts for 10% of the world wheat market, 15% of the corn market, and 13% of the barley market.

How does war affect the food supply? ›

Warring parties may plunder an enemy's food supply, deliberately destroying farms, livestock, and other civilian infrastructure. Conflict can cause food shortages and the severe disruption of economic activities, threatening the means of survival of entire populations.

The war has also substantially limited the ability of Ukrainian farmers to grow and ship their crops. The same source estimates the war has imposed an additional $36.2 billion in indirect costs to agriculture, mainly in the form of foregone production and higher logistics costs for continuing agricultural exports.

U.S. total imports of agricultural products from Ukraine totaled $143 million in 2019. Leading categories include: fruit & vegetable juices ($48 million), other vegetable oils ($31 million), snack foods ($12 million), other dairy products ($2 million), and processed fruit & vegetables ($918 thousand).

Ukraine is normally the world's top producer of sunflower meal, oil, and seed and the world's top exporter of sunflower meal and oil.

Ukraine is a major exporter of sunflower, maize, wheat and barley.

Actually wheat is the primary commodity affected by the war. Russia is the world's largest exporter of wheat, accounting for about 18%, nearly 20% of global exports in 2021. And Ukraine accounts for another 10%.

Even though thousands of items became scarce during the war, only those most critical to the war effort were rationed. Key goods such as sugar, tires, gasoline, meat, coffee, butter, canned goods and shoes came under rationing regulations. Some important items escaped rationing, including fresh fruit and vegetables.

What has been exported so far? As of May 2023, over 30 million tonnes of grain and other foodstuffs have been exported via the Black Sea Grain Initiative.

Export of grains and oilseeds from Ukraine since Russia's invasion of Ukraine in February 2022, by mode of transportation. Due to these problems, export costs surged from the pre-war $30-$40 per ton to $150-$200 per ton, and thus severely depressed domestic grain prices (Figure 2).

Satellite observations have showed signs of wheat production reduction in Ukraine in the season 2021–2022. Considering the uncertainty of the conflict duration, we have designed three scenarios (i.e., slight, medium, and severe) depending on how the war would significantly impact the wheat harvest and trade disruption.

What agriculture product comes from Ukraine? ›

Ukraine's food processing industry comprises over 40 different sectors. However, the majority of agricultural exports, with the exception of vegetable oils, are raw goods such as corn, wheat, rapeseeds, and soybeans.