Why is everyone so concerned about wheat?
Wheat is the third most common and widespread crop after corn and soybeans. As one of the oldest, cheapest and most versatile grains, today it remains an important component of food security.
These nutritious grains are essential to ensuring a sustainable global food supply for present and future generations. For centuries, wheat has been a staple ingredient not only in industrialized nations but especially in developing countries. Today, more than 80% of the world’s wheat is used for flour.
Although wheat is spread all over the world, wheat production is in the hands of a few countries. just awesome 86% of world wheat exports It comes from only seven countries, while only three of them hold nearly 68% of the world’s wheat reserves, with some of the world’s most vulnerable and poorest countries dependent on it for more than half of their wheat imports.
Figure 1: The world’s largest wheat exporters, 2020
Both Ukraine and Russia are major players in the international highly concentrated wheat market. Described by many as the breadbaskets of much of the world, these two countries alone account for just under 30% of the world’s wheat exports. Most of the wheat they produce is sent to North Africa, the Middle East and Asia Countries such as Egypt, Indonesia, Bangladesh, Turkey and Yemen are among the largest importers. In 2020, Russia and Ukraine too contributed 20% It accounts for the total food commodities purchased by the World Food Programme, and plays a key role in protecting food security in developing countries around the world.
Did the war in Ukraine sparked a global wheat crisis?
The Russian invasion of Ukraine in February 2022 radically changed the situation. Since the beginning of the war, experts have warned of a possible wheat shortage. At first they were afraid of it Ukrainian farmers may not be able to harvest all existing crops or even plant new ones this year, resulting in Disruption of local and national supply chains. However, nAs early as four months into the conflict, it is now clear that The effect could be much greater than expected and could lead to a compromise Wheat supply all over the world. Indeed, while armed conflicts lead to immediate food shortages in the countries directly involved, the effects of wars on the food chain will always be Ultimate on a larger.
We are on the brink of a global food crisis. However, the situation in which we find ourselves is more complex than we think. as such Atlantic Ocean Writer Robinson Meyer puts that: “There is no shortage of wheat worldwide. There is a global problem with wheat in the wrong places.” Indeed, Ukraine – at least for now – still produces grain. However, according to estimates, the fate of More than 55 million tons of wheat – the total amount that Russia and Ukraine produce combined – is now uncertain due to the ongoing conflict. The biggest problem the war-torn country faces is not how to produce it but how to get it out. More than 90% of Ukraine’s wheat exports leave the country via the Black Sea. However, the ports were blockaded by Russian soldiers, forcing the country to export its goods by rail, barge or trucks, which, however, could handle only a small part of the exports compared to cargo ships.
As the conflict develops and the situation becomes increasingly unstable, the world is preparing for the impact of a potential global wheat crisis. The United Nations has warned that 30% – 40% of the fall 2022 harvest in Ukraine is at risk, as farmers have not been able to plant crops. This may lead to a possible loss of 19 to 34 million tons of export production this year. The consequences of a prolonged war could be even more serious, with the number likely to reach 43 million tons, the equivalent of the calories consumed by nearly 150 million people.
But there is another factor threatening wheat crops in Ukraine and Russia. Together, both countries produce nearly a third of the world’s exports of ammonia and potassium, which are key components of fertilizers. The shortage of these raw materials fueled by the Ukraine-Russia conflict has contributed to a Prices go up by nearly 30%. Sanctions imposed on Russia have also inflated energy prices. Which makes fertilizer more expensive.
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War is not the only issue
Despite its devastating consequences for the global food supply chain, the war in Ukraine is only exacerbating a problem that existed long before the country was invaded. Climate change and the COVID-19 pandemic It had already hurt crops around the world in the past two years, disrupting exports, driving up food prices, and increasing poverty and hunger in the world’s least developed countries.
Climate change events are playing an increasingly important role in food insecurity. In the summer of 2021, the world faced a shortage of wheat due to heat waves and droughts that hit the United States and Canada, the second and third largest exporters of wheat after Russia. Likewise, China faced its worst-ever crop conditions due to climate change last year, when the rains that topped the chart nearly hit the ground running. 30 million acres of crops And delayed planting of more than 18 million acres of land, about one-third of the total area of winter wheat in China.
This year, the situation has become more serious and all eyes are on India. The South Asian country is currently dealing with a A heat wave broke a record It hurts food crops – with wheat yields almost halved in the hardest-hit areas – and hits hard on an already unstable economy. When discussions about a possible wheat shortage began amid the Russian invasion of Ukraine in March 2022, Prime Minister Narendra Modi announced that the country would Step in and seize the gap The war left in the wheat export market. In fact, last year India achieved record wheat production during the spring season – which occurs in winter, usually in October and November – and was well on its way to another prosperous year.
However, Moody take a step back They decided to stop exporting wheat amid the prolonged heat wave that brought the country to its knees and severely damaged its crops. Some Indian farmers appreciated it 10% to 15% of their crops are already irreversibly endangered Because of the sweltering heat, the future prospects don’t look encouraging either. In fact, while the harvest is just over, the heat can damage the plants and prevent them from forming any grain at all by the upcoming spring season.
India’s decision to prioritize the domestic market by restricting exports has been heavily criticized. While the country is not among the world’s largest breadbaskets, experts believe that preventing other countries from accessing their stocks while wheat supplies are already limited is exacerbating the problem.
Figure 2: Countries mostly affected by export restrictions amid conflict in Ukraine
A global supply shortage has already contributed to the outbreak of wheat prices, which rose by 40% between February and April 2022. The economic instability and food insecurity caused by the invasion has so far prompted 20 countries to impose restrictions on exports of wheat and corn, and other staples, covering About 17% of calories traded globally. Besides India, Indonesia recently also imposed Palm oil export ban In an effort to protect domestic consumers from the high prices of vegetable oils amid the war. However, experts fear that such widespread protectionism could have a ripple effect and drive up prices around the world. fueling poverty and hunger in the poorest countries and Leading to a highly dreaded global food crisis that, once again, will Affect those who can not afford it.
The precarious situation, combined with the effects of the coronavirus pandemic still largely being felt around the world, could further deteriorate conditions, with the United Nations warning that 7.6 to 13.1 million additional people He could starve as the war went on, jumping from 276 million to More than 323 million people.
EO position: The world faces a bleak outlook for global wheat supplies. With crops already endangered by climate change, crops are now threatened by the conflict in Ukraine, which has crippled the country’s exports. Wheat deficiency is not just about food. When countries face scarcity in basic food supplies, the consequences are felt across all sectors, affecting their economy and society as a whole. Now more than ever, it is critical to reform food security by addressing, first and foremost, climate change, which is by far the greatest stressor for the agricultural sector.