The Ukraine war and the impending pandemic of hunger-Part One

 malnutrition hunger

For the world’s vulnerable populations already reeling from one of the worst economic shocks and an unprecedented hunger and livelihoods crisis resulting from the Covid-19 lockdowns, Russia’s war in Ukraine poses an existential threat. In this two part series researcher Sajai Jose looks at the way food production across the globe is set to fall due to supply chain disruptions raising the spectre of mass hunger in poorer parts of the globe.

Food, fuel, fertilizer: The Russia-Ukraine war threatens to be a perfect storm

“Yes we did talk about food shortages, and it’s gonna be real. The price of the sanctions is not just imposed upon Russia, it’s imposed upon an awful lot of countries as well, including European countries and our country as well.” This warning came from none other than U.S. President Joe Biden, during a press conference at a NATO summit in Brussels recently.

There are good reasons why the war, and the sanctions imposed on Russia, is having such a major impact on the world. Russia, together with Ukraine, accounts for 30% of global wheat exports, 32% of barley, and 18% of corn – three crops that play a critical role in global food supplies. The two countries also account for nearly 80% of sunflower oil exports, another key commodity. Russia also supplies 14% of coal briquettes used in power generation worldwide, 10% of the world’s oil, and is the world’s biggest natural gas exporter. Russia is also a major supplier of crucial metals like iron (5.2%), aluminum (6%) and nickel (10%), and the world’s largest supplier of palladium with a 40% market share.

A month after Russia invaded Ukraine, global commodity markets are still reeling from the shock, felt particularly keenly in global food, fuel, fertilizer and metal prices. In the days following the invasion, wheat prices increased by as much as 70%, barley by 33%, corn by 21%, some fertilizers by 40%, and natural gas by 60%, while crude oil prices rose to over $130 per barrel.

No wonder then that the Russian invasion of Ukraine prompted UN chief Antonio Guterres to warn of a “hurricane of hunger and a meltdown of the global food system.” He pointed out that the UN’s global food prices index was at its highest level ever since the war started, sharply increasing food insecurity for the world’s 45 least developed countries, who import at least one-third of their wheat from Ukraine or Russia. The chief of the World Bank David Malpass called it an “economic catastrophe that comes at the wrong time” given already high levels of inflation. According to an International Monetary Fund analysis, “Steeper price increases for food and fuel may spur a greater risk of unrest in some regions, from Sub-Saharan Africa and Latin America to the Caucasus and Central Asia, while food insecurity is likely to further increase in parts of Africa and the Middle East.”

Scott Irwin, agricultural economist at the University of Illinois, highlighted the problem starkly in a viral tweet: ““I am convinced it is going to be the biggest supply shock to global grain markets in my lifetime. As just one data point. It has been reported that there are 600 million bushels of corn contracted for export that is currently trapped in Ukraine. And what about 2022 [production]?”

The fertilizer conundrum

Russia is the world’s largest country, occupying 11% of the earth’s inhabitable land mass (to compare, other large countries – Canada, China and the U.S. – occupy only roughly half that much area each, at around 6%). More importantly, it’s a major agricultural power, and also one of the world’s biggest producers of fuel (especially natural gas) and metals. Such size and productivity makes for an over-sized role for Russia, and to some extent Ukraine, in the hyper-critical and interlinked sectors of food and fuel.

However, as important as these two may be, it is a third sector – fertilizer – that could be most critical in the months ahead. There are two reasons for this: Russia is the world’s largest fertilizer exporter, and also the world’s top exporter of natural gas, a crucial and not easily replaceable input in the production of nitrogen-based fertilizers.

COVID Response Watch LogoRussia supplies 13% of the global fertilizer output, including urea, ammonia and potash, of which it was the number one exporter in 2021. According to Bloomberg analyst Alexis Maxwell, “Russia is a major low-cost exporter of many kinds of crop nutrients. No other nation has the same breadth of readily exportable fertilizer supply. Their fertilizers move to all continents.” Not surprisingly, fertilizer prices spiked sharply after the Russian invasion of Ukraine, with prices for the widely used nitrogen fertilizer urea surging 29% from the previous week, setting a record for the U.S.’ 45-year Green Markets index.

Earlier this month, Russia suspended fertilizer exports, presumably as a pressure tactic to counter the harsh economic sanctions imposed on it by the West. To compound matters, the U.S. and its European allies have also imposed sanctions on Russian ally Belarus, one of the world’s leading producers of potash. These developments are especially alarming because the world has already facing a fertilizer crunch and resulting high prices starting from 2020, attributed to higher production costs (especially the price of natural gas) and supply chain disruptions resulting from the Covid-19 lockdowns.

The implications are so serious that it forced Andrei Melnichenko, a Russian businessman with major stakes in coal and fertilizer production, to warn of a looming food crisis. “The war has already led to soaring prices in fertilisers which are no longer affordable to farmers. Food supply chains already disrupted by Covid-19 are now even more distressed. Now it will lead to even higher food inflation in Europe and likely food shortages in the world’s poorest countries,” he said.

The U.N.’s Food and Agriculture Organisation (FAO) expects large grower countries—Australia, Argentina, India and the United States—to make up for grain shortfalls from Ukraine and Russia. However, the FAO estimates 20 to 30 per cent of wheat, corn and sunflower seed crops may not be planted or go unharvested during Ukraine’s 2022-2023 season.

The sheer gravity of the crisis was outlined by David Friedberg of the farm insurance company Climate Corporation, in a recent podcast about the second-order effects of the Ukraine war. “The price of nitrogen has gone from $200 to $1,000, the price in potassium has gone from $200 to $700, and the price of phosphorus has gone from $250 to $700. So now it is so expensive to grow a crop, that a lot of farmers around the world are pulling acres out of production. So they’re going to grow less this year than they would have otherwise because it is so expensive and they cannot access fertilizer.”

There’s a reason a shortage of fertilizer is even more critical than a temporary shortage of food. Food shortages can be overcome by nations – even if at a high economic cost – by dipping into reserve stocks, or buying from international markets at a higher price. In comparison, a fertilizer shortage in planting season is a crisis with no room for negotiation or maneuvering. In the coming months, not only will the world have to contend with a shortfall in fertilizer supply, it will also be severely constrained in its efforts to make fertilizer independently due to the high price or unavailability of natural gas.

As Friedberg warned, “The planet Earth operates a 90-day food supply – that means that once we stop making food, humans run out of food in 90 days. Food supplies are going down and it is going to be catastrophic. It will not happen linearly across all nations. What happens is the vulnerable nations lose their food supply first as the rich countries buy that food supply to secure their population’s calories.”

Growing uncertainty

If Russia’s invasion of Ukraine, followed by Western sanctions and retaliatory measures (such as stopping fertilizer exports) by Russia constituted the first phase, it looks like the conflict in Ukraine has entered an even more dangerous stage now.

Last week, the G7 group of countries, which had earlier frozen more than $300 billion worth of Russian foreign currency reserves held in Western banks, rejected Russia’s demand to be paid in rubles for its gas supplies to Europe. Russia had threatened to cut off supply if the demand was not met; no meager threat considering that Russia supplies 40% of Europe’s gas.

In short, we have already entered a spiral of events which no country or bloc, however powerful, is unable to control, but which all must endure – as evident from Joe Biden’s warning to U.S. citizens to prepare for food shortages. The impact is already being felt by the most vulnerable. The U.N.’s World Food Programme has already cut its rations to Yemen, where nearly 20 million people caught in the country’s protracted conflict are almost entirely dependent on food aid.

These latest disruptions have made emergency food aid more expensive, and the WFP’s costs have already increased by $71 million a month, enough to cut daily rations for 3.8 million people. The war in Ukraine has greatly added to that burden. As WFP senior spokesman Steve Taravella put it, “We’re taking from the hungry to feed the starving, is what it comes down to, just because the numbers are so great. Conflict, covid, climate — we talk about the three Cs, those things that are driving hunger around the world. The reality is Ukraine is putting a fourth C on that: Cost.”

Inflation and supply chain disruptions resulting from the lockdowns had already caused a dramatic increase in poverty and hunger worldwide. The WFP estimates that between 2019 and 2022, the global figure for people at risk of famine increased from 27 million to 44 million, with an additional 232 million people one step behind that category. India too is among the nations at risk, given the accelerating post-lockdown hunger crisis which even massive food security schemes have failed to ameliorate.

It should not have come as a surprise, but from the perspective of food security, the Russia-Ukraine war is unlike any other conflict in recent history. Apart from all other considerations, it holds especially grave implications for the world’s vulnerable populations, who in the post-lockdown phase have been already enduring levels of distress not seen in decades, in ever larger numbers.

Sajai Jose is a researcher and journalist

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