US Treasury Secretary Janet Yellen was invited to G20 meetings and warned on Thursday, April 21, of the risk of a global food crisis.
Flour and bread, soon to be a rare commodity? For about fifty countries, which import more than 30% of their grains and oilseeds from Ukraine and Russia, this scenario could become a reality. Between the bombings, the shutdown of the economy and the closure of certain ports, the available quantities of grains and oilseeds decline sharply.
The Middle East in Wheat Shortage
Because these two countries are behemoths of world grain production: together they account for 30% of world wheat exports. And of the world’s biggest buyers, Egypt and Turkey could bear the full brunt of this future grain shortage. 60% of their wheat imports come from Russia and Ukraine.
Their supplies are already lagging: Egypt and Turkey expect 6.6 million and 4 million tons respectively for the second half of the 2021/2022 marketing year, according to the Food and Agriculture Organization of the United Nations. So much so that Egypt stopped all grain exports in March to replenish its national stocks.
Like them, much of the countries of the Middle East and North Africa import more than half of their wheat sources from the two warring sides. Tunisia, Yemen, Libya… Some countries, such as Eritrea or Armenia, are even almost 100% dependent on Russian and Ukrainian wheat.
Turkey concerned about sunflower oil
In addition to this shortage of wheat, there are tensions on maize exports, whose resources are expected to account for 18% of world trade in 2021/2022. What aggravates the situation of Egypt and Turkey, which import almost a third of their maize from Ukraine. Other exporting countries, such as Brazil or Argentina, will be able to offset some of the 14 million tons that Ukraine should have delivered to the world by September 2022. But not everything. Even less so for the sunflower oil wells, of which Russia and Ukraine supply 80% of world exports, that is to say almost all of them. Among the largest importers of sunflower oil are India, the European Union, China, Iran and… Turkey, which, according to the FAO, still expects 5.4 million tons by September 2022.
Food prices explode by 39% in Africa
When Turkey’s agriculture minister assured in early March that the country has “sufficient stocks of sunflower oil”, prices in the country skyrocketed. In one year, food prices have risen by 70%.
As in Turkey, the price of grains and oilseeds in the Mediterranean is rising. In March alone, the FAO grain price index rose 24.9 points from February, marking its highest level since 1990. Depending on the severity of the food crisis, the FAO estimates that the rise in wheat prices during the 2022/2023 Campaign will be 19.5% for maize and 17.9% for other oilseeds. Tunisia, Iraq… Demonstrations against food inflation are increasing and the food crisis is sparking fierce social protest.
In the southern Mediterranean, in Central Africa and West Africa, the grain shortage is exacerbating inflation that has been going on for several months. In the last quarter of 2021, food prices already rose by 39% compared to the average of the past five years. These countries are highly dependent on Russian and Ukrainian resources. According to the United Nations Conference on Trade (UNCTAD), between 2018 and 2020, 25 African countries imported more than 33% of their wheat from Ukraine and Russia. Of the most affected countries, Benin imported nearly 70% Russian wheat in 2021, Somalia imported more than 40% Russian wheat and more than 50% Ukrainian wheat.
1.79 billion euros in food aid
Rising food prices could push 10 million people into poverty, US Treasury Secretary Janet Yellen said during a first roundtable discussion at the G20 on Tuesday. Confronted with the millions of tons of grain still in the ports of Russian and Ukrainian ports, she called on the IMF and the World Bank to find solutions. On April 7, following statements by Niger President Mohamed Bazoum, several countries, including France, have already pledged to increase their food aid to €1.79 billion.