Ukrainian grain shortage casts shadow of famine globally

Trade and Economics - November 30, 2022

The war in Ukraine has generated an unusual shortage in the supply of grain that has put the food security of the West in check, with the fear of shortages as the protagonist.

According to a recent report by the G7 agriculture ministers, Ukraine and Russia are the main exporters of grain, followed by the United States, as they are responsible for shipping around 30% of the wheat consumed worldwide.  Historically, at least 26 countries import up to half of the wheat they consume from Ukraine and Russia, and 24 others import at least 30%.

In this regard, and as reported by the Food Export Board, during the first nine months of 2018 Ukraine sold abroad products of the food and agricultural industry worth more than nine billion euros. Shipments of cereals took the first place in the table, worth 3800 million euros. Following grain shipments were exports of fats and oils, prefabricated edible fats and waxes (2.5 billion), dairy products, poultry eggs and natural honey.

In recent years, Ukraine had exported 40% of its corn and wheat to Africa and the Middle East and had established itself as the main supplier of corn to China. Thus, Ukrainian corn exports for the 2020-2021 season were 24 million tons; for barley, 4.2 million tons exported; and in the case of wheat, Ukraine ranked as the world’s seventh largest producer and sixth largest exporter, with 21 million tons.

The context surrounding Ukrainian grain has been severely affected since Russia’s invasion of its territory. Having halted international trade in grain from the east, Russia recently agreed to allow grain exports, an agreement that Putin was quick to halt. Beyond Europe’s borders, the UN has warned that the situation could lead to a wave of famine in Africa, Asia and the Middle East, putting at risk millions of people – more than 300 million according to various NGOs – in dire straits around the world, threatened by hunger.

At least 175 large ships engaged in transporting two million tons of grain destined to feed around seven million people have been grounded in the Black Sea, while Moscow claims it “cannot guarantee their safety”. In the face of this threat, insurance companies have stopped providing coverage for these ships, making it even more difficult for them to leave port.

No one can say exactly what will happen to the export of grain from Ukraine. The United Nations has recently announced that there will be no more outbound operations of suitcases loaded with grain from Ukrainian ports.

However, President Vladimir Putin has held meetings with Turkey’s Erdogan, in which the Russian did not rule out maintaining the decision to allow the humanitarian corridor that would allow the passage of cargo ships with grain, on condition that the attacks that took place off the coast of Crimea on the Russian war fleet are investigated.

That humanitarian corridor, whose starting point is the Bosporus Strait in Turkey, would allow millions of tons of Ukrainian grain to be transported. Amir M. Abdulla, the UN coordinator for the agreement on the exit of grain through the Black Sea, has reminded that civilian cargo ships cannot be subject to military attacks.

In view of the weakness of the European nations in terms of food sovereignty, the flow of grain transport must continue. A few days ago, some ships set sail, but given the context, no one knows if they will be the last.