The Cost of War: A World  Food Crisis on the Horizon

Ukraine is the second largest country in Europe, after Russia

 

Ukraine’s Tradition of Exports . . . Due to its expansive fertile lands, prior to the ongoing war with Russia (the Russo-Ukrainian War), Ukraine was one of the largest grain exporters in the world.   A Russian Blockade in the Black Sea insures that Ukraine will export no-more!             

 

Ukraine was among the world’s top agricultural producers and exporters  and was often described as the “bread basket of Europe”. As was evidenced during the 2020/21 international wheat marketing season (July-June), when it ranked as the world’s sixth largest wheat exporter, accounting for nine percent of wheat trade, world wide.

 

The country was also a major global exporter of maize (corn), barley and rapeseed (oil-seed). In 2020/21, it accounted for 12% of global trade in maize and barley and 14% of world rapeseed exports.

 

Ukraine’s trade share was even larger in sunflower-oil production, accounting for about 50% of the world’s exports in 2020 & 2021.

 

However, aside from the growing loss of lives and the ever increasing humanitarian needs, the likely disruptions caused by the Russo-Ukrainian War to Ukraine’s grain and oil-seed sectors are sure to change all that!

This, coupled with potential food and fertilizer export difficulties encountered by the Russian Federation resulting from economic sanctions by many western countries, is sure to jeopardize the food security of many countries, particularly those that have become dependent upon Ukraine and the Russian Federation for their food and fertilizer imports. For example Eritrea, a small country near the Horn of Africa region of Eastern Africa, purchased 47% of its wheat imports in 2021 from Ukraine. Yeah, the other 53%, came from the Russian Federation.

 

Overall, more than 30 nations depend on Ukraine and or the Russian Federation for over 30 percent of their imported wheat and fertilizer needs; many of which are located in South America, North Africa, and in Western and Central Asia.

 

The invasion of Ukraine will likely disrupt the global fertilizer trade especially since Russia is the world’s largest exporter of fertilizers. A few of the primary importers of fertilizers from Russia include Brazil (21%), China (10%), the US (9%), and India (4%).

Based upon the chart displayed above, Brazil may see severe economic effects since Brazil imports more than 85% of its fertilizers.  Fertilizer supplies in the US may be less of an issue since the US, unlike Brazil, which met slightly more than 4% of the country´s demand in 2020, has strong domestic fertilizer production capabilities. Still, US farmers are likely to see higher fertilizer prices because of the interconnection of the global fertilizer trade industry.

 

And too, because the US and Brazil are the top global exporters of many agricultural commodities, vegetable shoppers in the US and beyond, are sure to see higher prices in the marketplace.  

 

The good news, by now, grocery shoppers everywhere, are sure to be accustomed to run-a-way inflationary prices created by the ongoing COVID Pandemic “recovery”! Sooo, as the Aussies say, no worries, Huh?

 

 

 

 

 

 

 

Sources:

https://www.19fortyfive.com/2022/03/russia-offers-to-end-war-if-ukraine-agrees-to-be-a-puppet-state/ 

https://en.wikipedia.org/wiki/Ukraine#Agriculture 

https://farmdocdaily.illinois.edu/2022/03/war-in-ukraine-and-its-effect-on-fertilizer-exports-to-brazil-and-the-us.html#:~:text=Brazil%20imports%2095%25%20of%20its,the%20country%C2%B4s%20demand