US Treasury Secretary Janet Yellen, who was invited to attend the G20 meetings, warned on Thursday, April 21, of the risks of a global food crisis.
Flour and bread, a soon-to-be scarce commodity? For about fifty countries, importing more than 30% of grain and oilseeds from Ukraine and Russia, this scenario could become a reality. Between the bombing, the shutdown of the economy and the closure of some ports, the available quantities of grain and oilseeds are in sharp decline.
The Middle East suffers from a shortage of wheat
Because these two countries are two giants of world grain production: they provide between them 30% of world wheat exports. Among the world’s largest buyers, Egypt and Turkey could bear the brunt of future grain shortages. 60% of their wheat imports come from Russia and Ukraine.
Their supplies are already in decline: Egypt and Turkey expect 6.6 million and 4 million tons, respectively, for the second half of the 2021/2022 marketing year, according to the United Nations Food and Agriculture Organization (FAO). So much so, that Egypt suspended all its grain exports in March to replenish its national stockpile.
Like them, a large part of the countries of the Near East and North Africa import more than half of the wheat resources of the two warring parties. Tunisia, Yemen, Libya … Some countries, such as Eritrea or Armenia, depend almost 100% on Russian and Ukrainian wheat.
Turkey concerned about sunflower oil
In addition to this wheat shortage, there are tensions over corn exports, whose Ukrainian resources would have represented 18% of world trade in 2021/2022. Exacerbating the situation of Egypt and Turkey, which import nearly a third of their corn crop from Ukraine. Other exporting countries, such as Brazil or Argentina, will be able to offset part of the 14 million tons that Ukraine should have given to the world by September 2022. But not all. Even less so for resources of sunflower oil, where Russia and Ukraine provide 80% of world exports, that is, almost all of them. Among the largest importers of sunflower oil are India, the European Union, China, Iran and … Turkey, which still expects 5.4 million tons by September 2022, according to the Food and Agriculture Organization.
Food prices rose 39% in Africa
If, in early March, Turkey’s Minister of Agriculture reassured that the country “has sufficient stocks of sunflower oil,” prices in the country are rising. In one year, food prices rose by 70%.
As in Turkey, the prices of cereals and oilseeds are rising in the Mediterranean basin. In March alone, the FAO Cereal Price Index rose by 24.9 points compared to February, bringing it to its highest level since 1990. Depending on the severity of the food crisis, the FAO estimates that wheat price increases could rise to 21.5% during the 2022/2023 campaign. 19.5% for corn and 17.9% for other oilseeds. Tunisia, Iraq… Demonstrations against food inflation multiply and the food crisis leads to strong social protests.
In the southern Mediterranean basin, in Central Africa and West Africa, the lack of grain exacerbated the inflation that had been present for several months. In the last quarter of 2021, food prices were already 39% higher than the average of the past five years. These countries are highly dependent on Russian and Ukrainian resources. Between 2018 and 2020, 25 African countries imported more than 33% of their wheat from Ukraine and Russia, according to the United Nations Conference on Trade (UNCTAD). Among the worst affected countries, Benin imported nearly 70% of Russian wheat in 2021, and Somalia imported more than 40% of Russian wheat and more than 50% of Ukrainian wheat.
1.79 billion euros in food aid
US Treasury Secretary Janet Yellen said Tuesday during a first round table of the Group of Twenty that rising food prices could then plunge 10 million people into poverty. Faced with the millions of tons of grain remaining in Russian and Ukrainian ports, she called on the International Monetary Fund and the World Bank to find solutions. On April 7, following the statements of Niger President Mohamed Bazoum, several countries including France have already promised to increase their food aid to 1.79 billion euros.