Up Next: Global Food Crisis?
Turns out Russia and Ukraine are sort of important if you like eating food
By Riley Waggaman, a Moscow-based writer and former “senior editor” at RT
With the biosecurity jackboot pressed against their necks, the meatshields of the world have been divided into two camps claiming to want the same thing: the liberation of the oppressed… in Ukraine.
But that’s neither here nor there.
Let’s talk about food, or more specifically: the soon-to-be lack of it.
As the plebes sling meaningless platitudes at each other on social media, a global food crisis is sneaking up on us. Can’t we all get along, and eat? This seems like a good compromise during these increasingly polarizing times.
Turns out Russia and Ukraine are sort of important in the Famine-Prevention Department. Unless there is a rapid U-turn on the world stage, food prices are going to go up. Way up. And that’s almost the best case scenario.
Let’s start with some numbers:
Roughly a third of world exports of barley come from Russia and Ukraine combined, 29 per cent of wheat, 19 per cent of maize, as well as 80 per cent of sunflower oil. Much of this is usually shipped through the Black Sea ports of Odesa, or Kherson.
Now imagine if a war—sorry, “not-war”—and an endless list of sanctions complicated the export of these agricultural products. Including fertilizers and crop nutrients—which Russia sends to farmers all over the world.
As an added bonus, imagine if it becomes more expensive to transport all this Russian and Ukrainian stuff—and everyone else’s stuff—because of soaring fuel prices.
No need to imagine anything, of course. Welcome to 2022. As the Russian Ministry of Industry and Trade noted on March 4:
Due to the rapid growth of world gas prices, plants have reduced the production of fertilizers, which only increased the demand for Russian products on the global market…
Currently, a situation is emerging where, due to sabotage of deliveries by a number of foreign logistics companies, farmers in Europe and other countries cannot receive the contracted volumes of fertilizers. This creates obvious risks of crop failure and, as a result, food shortages for the countries of Western and Eastern Europe, Latin America, South and Southeast Asia.
Let’s briefly survey some of the damage.
Bastions of stability such as Egypt, Lebanon and Libya rely on Russian and Ukrainian wheat imports. Wheat stockpiles will likely prevent a catastrophic shortage in the short-term, but even a modest increase in the price of bread could be enough to trigger Mad Max Middle East.
But don’t feel left out if you live in Europe.
“Everything is going up vertically. The whole production chain for food is under pressure from every side,” Abdolreza Abbassian, the ex-head of agro-markets at the UN’s Food and Agriculture Organisation, told the Sydney Morning Herald. “I have never seen anything like it in 30 years and I fear that prices are going to go much higher in the 2022-2023 season. The situation is just awful and at some point people are going to realise what may be coming. We’re all going to have to tighten our belts, and the mood could get very nasty even in OECD countries like Britain,” he said.
And let’s not forget Hamburgerland.
Earlier this week, a corn and soybean farmer told Tucker Carlson that “soaring fertilizer prices are likely to spike food prices” and predicted grocery bills will reach $1000 a month. He also warned of “empty shelf syndrome.”
Bloomberg literally describes the situation we’re facing as some sort of Malthusian dilemma (or opportunity?):
It’s hard to overstate the importance of fertilizer. The advent of synthetic ammonia fertilizers about a century ago is widely credited for helping food production keep pace with global population growth, freeing humankind from its Malthusian constraint. In that time, the planet’s population has gone from 1.7 billion to 7.7 billion, largely thanks to enormous growth in crop yields. Some experts have estimated that the global population might be half of what it is today without nitrogen fertilizer.
There’s also trouble up ahead for the Russians (and your humble Moscow correspondent).
Import substitution was supposed to shield Russia from economic shenanigans. The policy has given a huge boost to Russian agriculture—but there’s a problem.
Apart from grains, Russia imports nearly all of its seeds. Yes, even potato seeds.
As one Russian farmer explained:
Today we buy seeds abroad, because during the Yeltsin era all seed funds were destroyed, and seed stations were closed,” said farmer Arkady Dudov. “It takes decades to revive all this… As a result, all our seeds are now Dutch and American. They sell us hybrids that we grow.
On February 1—ah, simpler times!—a senior Russian lawmaker described his country’s reliance on imported seeds as close to catastrophic:
This is on top of soaring inflation (not unique to Russia of course). Even before the non-war began, the prices of basic staples like buckwheat were exploding.
Meanwhile, Russian agriculture is almost entirely dependent on imported equipment, creating further problems for farmers:
The ban on transactions with non-residents of the Russian Federation, as well as US and European sanctions regarding the termination of supplies of equipment to the Russian market, will create significant problems for domestic agricultural producers. Market participants declare an extremely high degree of dependence on imported equipment, consumables and components, which cannot be replaced by Russian analogues now. Experts note that while Russia is able to meet its own needs for basic products, however, given the current structure of production, problems may arise in the medium term.
It’s a bit of a mess.
As Russia’s top party-pooper noted the other day:
It is already clear how events are unfolding—the ground is being prepared for the disruption of this year’s sowing campaign. Here are military actions in Ukraine, here are hastily imposed restrictions on the supply of fertilizers, here are convulsive bans on food exports. They are just beginning, but according to the logic of things, they will become a landslide in just a month.
The crisis (and after it the delayed catastrophe) can affect several regions at once, with the Middle East and North Africa becoming the most significant and large-scale. Imbalances will lead to price spikes, panic and speculation in the food market. The price of wheat is already rising at a rapid pace. All this will result in a sharp rise in prices for basic socially important food products, and a well-known paradox will arise—with an excess of food, its consumption will be sharply reduced. According to various estimates, the catastrophe will cover macro-regions with a total population of 2 billion people.
That is why the “special operation” is a minor episode of little importance against the background of impending cataclysms. For those who are dying today on the territory of Ukraine, this, of course, is little consolation, but the position of the West looks extremely pragmatic. And, of course, cynical. The process has been launched, these nine days have launched the transition from one phase “epidemic” to another— “hunger”.
The fact that Ukraine and Russia have been used as a tool speaks not so much about the mind of the West, but about the impenetrable stupidity of the direct participants in the current competition.
Pretty much sums it up.
Source: Edward Slavsquat