Ukraine gets bombed, the world goes hungry

“As you sow, so you shall reap.” Putin’s war machine has sown violence and reaps only misery. The knock-on effects are being felt all over the world, including in some of the poorest countries, especially when it comes to food security. Ukraine’s wheat farmers are struggling to sow the spring season’s crop. Some farmers are working in fields close to shelling and small arms fire, others are unable to venture out at all. The Agriculture Ministry says the areas available to cultivate have shrunk drastically from last year. When it comes to harvest time, the less wheat grown, the bigger the problem for countries such as Yemen, Egypt, Ethiopia, and Lebanon. They are among 26 countries, mostly in Africa and the Middle East, which rely on Ukraine and Russia for more than half of their annual imports of the staple. Supplies from Russia are also in danger due to the war.

The two countries account for about 30% of global wheat exports, but according to a report by Goldman Sachs, that rises to more than 40% between August and October. This suggests that if the fighting in Ukraine continues, there will be a significant shortage of wheat in the summer and autumn, and that what is available will go up in price as will other Ukrainian and Russian exports such as sunflower oil.

This is a classic recipe for unrest, especially in volatile countries such as Egypt which is a good example of the problems many countries may face. Both supply and price of food (notably bread) has long been a source of instability in Egypt. Its domestic wheat crop provides only 50% of the requirement of a population of 105 million. It struggles to grow more due to water shortages which are partially connected to the dispute over Ethiopia’s Grand Renaissance Dam near the headwaters of the Blue Nile.

In standard Arabic the word for bread is “khobz”, but in the language of the Egyptian street it’s called “aish” which literally means “life”. In Egypt, aish is subsidised by the government, mostly through its Baladi programme which has its roots in the 1950s and reforms introduced by President Nasser. Egyptians are the largest consumers of bread in the world and the Baladi system provides millions of them with dozens of subsidised loaves each month. But this requires the government using most of its wheat imports to ensure the people have bread. Given that imported wheat is going up in price, a reckoning may be on the horizon.

President Abdel Fattah el-Sissi will be reluctant to cut the subsidy. He came to power in a coup following the Arab uprisings during which one of the chants heard on the streets was “bread, freedom, justice!”. When he tried to increase bread prices there were immediate protests. Advice to the people to “trust in God” and to lose weight failed to quell people’s anger. Previous leaders have experienced the wrath of the street when food staples were threatened, notably President Sadat.  In 1977 he announced the end of subsidies on flour, rice, and cooking oil which sparked what became known as “The Bread Intifada”. Dozens of people were killed during two days of violence in most of the major towns and cities. The subsidies were rapidly reinstated. So the leadership in Cairo is caught – it can’t cut subsidies as that risks mass rioting, but it will struggle to find the money to pay for the more expensive wheat it must import to provide the product it is subsidising.

The government says it has enough supplies to last the country through to the early autumn. Before then it must find the alternative sources and the money.

India, the world’s second largest producer of wheat, is looking to increase its export market and is in talks with Saudi Arabia to ship supplies there. But Saudi Arabia has money, Egypt does not, and one of its major revenue earners, tourism, is another victim of the Russian invasion. There are far fewer Ukrainians and Russians visiting the pyramids and the Red Sea resorts this year.

Argentina, Australia, Canada, and Kazakhstan are also expected to increase exports, but most of their crops will not be ready to ship by the time the expected shortfall hits the most vulnerable countries in the late summer and early autumn. What is produced will be more expensive. Fertiliser prices have hit record highs partially because shipments from the top exporter, Russia, have diminished. More expensive, and less fertiliser is likely to result in fewer crops. Fewer crops will result in higher prices and the countries which rely on the usual supplies at the usual price are the very ones which cannot afford to pay more.

In early March Ukraine restricted wheat and other grain exports. It hopes to be able to reverse that soon. But the longer the war drags on, the longer the knock-on effects go on. Even if it can sow most of the fields this spring, which is doubtful, it still needs the war to end so it can repair and open the ports through which most of the grain exports travel.

The Grim Reaper invades Ukraine, and children in Egypt and Yemen go hungry.