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bne June 2022 Companies & Markets I 23
bne:Green
Climate change, war in Ukraine and rising prices create perfect storm threatening global food security
Richard Lockhart in Edinburgh
The war in Ukraine has interrupted grain exports from the country and could create a global food crisis as vulnerable wheat importing countries in Africa and the Middle East face shortages and rising prices.
Ukrainian President Volodymyr Zelenskiy this week warned that the international community to take immediate steps to end Russia’s blockade of Ukraine’s ports.
“For the first time in decades there is no usual movement
of the merchant fleet, no usual port functioning in Odesa. Probably this has never happened in Odesa since World
War Two,” he said after the port of Odesa was hit by Russian missiles on May 9.
“Without our agricultural exports, dozens of countries
in different parts of the world are already on the brink of food shortages. And over time, the situation can become downright terrible ... This is a direct consequence of Russian aggression, which can be overcome only together – by all Europeans, by the whole free world.”
Meanwhile, Russia itself has halted the export of grain and fertiliser to “unfriendly countries” in response to Western sanctions.
The war is exacerbating more established threats to food security posed by climate change, as rates of deforestation and desertification rise in vulnerable countries in Africa and Asia, often caused by overfarming and intense agriculture.
The war also follows sustained rises in food over the last decade, especially in the last three years.
The FAO cereal price index showed prices hit their previous 2008 high in 2021, and since the invasion they have exploded. Between 2019 and March 2022, cereal prices have increased by 48%, fuel prices by 86% and fertiliser prices by 35%.
Wheatfield / DICKOV - STOCK.ADOBE.COM
Rising prices
The removal of Russian and Ukrainian wheat from world markets has pushed wheat prices to a 14-year peak in March, and maize prices reached the highest ever recorded, the International Panel of Experts on Sustainable Food Systems (IPES) said in a report.
Almost 40% of Africa’s wheat imports come from Ukraine and Russia, while rising global wheat prices have sent bread prices in Lebanon 70% higher, IPES said.
Russia and Ukraine supply about 30% of global wheat exports, but those have collapsed as a result of the conflict.
The report highlighted that the sudden halt to wheat and fertiliser exports from Ukraine, Russia and Belarus, combined with droughts, floods and high temperatures heat fuelled by climate change, are damaging more harvests.
This is pushing up prices and causing food insecurity in some of the world’s most vulnerable countries, pushing up poverty levels and threatening wider development goals such as access to clean water, energy and education.
The war in Ukraine has sparked the third food crisis in 15 years, the report warned.
However, the spike in food prices builds on the more worrying underlying trend of food insecurity. The report warned that the “underlying rigidities, weaknesses and flaws in global food systems” are fanning the flames of global hunger.
Fundamental flaws in global food systems, such as heavy reliance on food imports and excessive commodity speculation, have allowed the Ukraine conflict to become a full-blown global food price crisis, the report concludes.
The UN Food and Agriculture Organisation (FAO) said that the number of undernourished people could increase by 13mn because of the current war-induced crisis.
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