Source: The Conversation (Au and NZ) – By David Ubilava, Senior Lecturer of Economics, University of Sydney
Russia and Ukraine between them account for almost a quarter of the world’s wheat exports.
Russia and Ukraine are also big exporters of maize (corn), barley, and other grains that much of the world relies on to make food.
Wheat alone accounts for an estimated 20% of human calorie consumption.
Since the start of February, as war became more likely, the grains and oilseed price index compiled by the International Grains Council has jumped 17%.
Russia and Ukraine account for one fifth of the world’s barley exports. Maize is a common substitute for wheat and barley.
Russia and Ukraine are also enormous producers of sunflower oil, between them accounting for around 70% of global exports.
Indonesia, Turkey and the Philippines are also big importers.
Supplies from Russia might come through – and Russia is in desperate need of foreign exchange. But Ukraine’s ports are closed, transport infrastructure is disrupted and might not be working when harvest season begins in July, and barley planting would normally begin about now.
Rationing and riots have happened before
Sudden shortages and price hikes will hit poor countries and their poorest citizens hard. Low income households spend far more of their income on staples such as bread than high income households.
The effects will flow through to meat and egg prices, as cereal grains are used as feed of livestock and poultry production.
Throughout history, violence and unrest have flowed from hikes in commodity prices. Egypt was racked with bread riots and rationing in 2017. Kazakhstan suffered massive protests in January after a spike in liquefied gas prices.
Humanitarian organisations are set to face greater calls for food aid, which will be more expensive to provide.
Fortunately, the big southern hemisphere wheat producers, Australia and Argentina, have produced bumper crops.
The value of Australian wheat production is set to hit an all-time high.
But food supply chains and global stability are certain to be tested.
It will take a village to stop this war and mitigate its repercussions. The rich and powerful of the village should do all they can to hold it together.
David Ubilava does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
– ref. Russia’s war on Ukraine is driving up wheat prices and threatens global supplies of bread, meat and eggs – https://theconversation.com/russias-war-on-ukraine-is-driving-up-wheat-prices-and-threatens-global-supplies-of-bread-meat-and-eggs-178879