17:33 03.03.2022

Russian aggression threatens world food security because of halt in grain exports from Ukraine – expert

4 min read

The Russian invasion of Ukraine, which caused the price of wheat to rise to $500/tonne due to the suspension of grain exports by Ukraine and the reduction of their supplies from the Russian Federation, will soon enough lead to an increase in the number of starvation deaths on the planet, especially in poor countries, as well as to additional spending on food for developed countries, says Andriy Yarmak, an economist at the Investment Department of the Food and Agriculture Organization of the United Nations (FAO).

"Wheat and corn account for 27% of all calories, or, in other words, all the food in the world! Ukraine and the Russian Federation together export more than 25% of all wheat in the world. This is a basic product for food security. There is no export from Ukraine now, from the Russian Federation almost stopped," he said.

"Prices are already in outer space. Wheat is already over $500! Where is this wheat going? Basically, these are third world countries. And it is already hard there and there is a threat of hunger riots," the expert said, emphasizing the threats posed by the Russian Federation to world food security on his page on Facebook on Thursday.

Yarmak said military actions of the Russian Federation are disrupting the sowing campaign in Ukraine, which is especially catastrophic given the high world prices for gas, and, accordingly, for mineral fertilizers. The combination of these factors leads to the fact that Ukraine will not be able to export grain for many months, and after a few more years it will reach pre-war crop volumes. At the same time, the isolation of the markets of other countries from the purchase of agricultural products from the aggressor country of the Russian Federation will also affect the supply of grain on the world market.

“During all this time, the number of people in the world who do not have access to the minimum set of calories will grow, according to my very rough minimum estimates, by 800 million people, and maybe by 1 billion, because I have not yet taken into account the collapse in the GDP of all countries of the world. This means a sharp increase in newborn mortality in the poor countries of the world and many deaths from starvation and other diseases caused by malnutrition among adults," Yarmak said.

He added that military operations in Ukraine will lead to a slowdown in the development of all mankind, since many children in the world, forced to live in conditions of food shortages, will not be able to realize their potential in the future, for example, to make new scientific discoveries.

"In the developed countries of the world, people keep savings in stocks. Now, they have already lost hundreds of billions of dollars in recent days. Now they will lose even more. They will also now spend hundreds of billions more on food, and this will also come from their savings. I want so that our friends in NATO and other developed countries understand: now you are already losing much more than Ukraine. Staying away from the conflict, you are now killing millions of children in the poor countries of the world, and with them your own future," the expert said.

As reported with reference to MarketWatch, on March 2 this year, wheat prices soared to a maximum since 2008 amid fears of possible interruptions in grain supplies due to the Russian invasion of Ukraine.

Quotes of May futures for wheat in Chicago jumped 7.6% during trading on Wednesday and reached $10.59 per bushel.

"Both Russia and Ukraine are major wheat producers, which together account for about 30% of global exports, so this is one area where the direct economic impact is acutely felt," Deutsche Bank analysts said.

The closure of the Black Sea ports "means that wheat supplies from Ukraine by sea will not be possible for an indefinite period of time," said Carsten Fritsch, commodity analyst at Commerzbank.

“In addition, shipping companies no longer accept orders to ship from or to Russia. And in any case, at present, almost no buyer will want to order Russian wheat. This means that up to 30% of world wheat exports are currently cut off from the market more or less," he added.