The war between Ukraine and Russia, which began on February 24, 2022, has wreaked havoc on important population centers, spread over rural areas, and resulted in significant displacement across Ukraine. Over 3.6 million individuals had been forced to escape their homes and traverse borders in search of the safety of their lives. More than a million people have been internally displaced. They have to leave their houses and cultivable land behind. The war has clearly created a significant and deteriorating food security crisis in Ukraine, interrupted livelihood security during the agricultural growing season, and impacted global food security, as they are one of the largest food suppliers in the global food market. International food costs had already hit an all-time high prior to the Ukraine conflict. This was attributable mostly to market dynamics, but also to high energy, fertilizer, and other agricultural services prices. The Food and Agricultural Organization of the United Nations (FAO) Food Price Index set a new historical high in February 2022, up 21% from a year earlier and 2.2 percent from its previous high in February 2011.
In the world commerce of food and agricultural products, the Russian Federation and Ukraine are major actors. The Russian Federation and Ukraine exported over 30% of the worldwide wheat market in 2021. Between 2016/17 and 2020/21, Russia's worldwide maize trade market share is very small, at 3%. Over the same time period, Ukraine's maize export share was higher, averaging 15%. Ukraine sold $4.89 billion worth of maize, ranking it the world's fourth-largest corn exporter. Maize was Ukraine's second-highest exported product in the same year. China ($1.38 billion, 28.3%), the Netherlands ($513 million, 10.5%), Egypt ($508 million, 10.4%), Spain ($460 million, 9.4%), and Turkey ($245 million, 5.01%) are the top destinations for Ukrainian maize exports (Observatory of Economic Complexity, 2020).
Exports of sunflower oil from both countries accounted for 55 quarters of worldwide supplies. Ukraine sold $129 million worth of sunflower seeds in 2020, making it the world's 11th biggest exporter of sunflower seeds. Sunflower Seeds were the 49th largest exported commodity in Ukraine in the same year. Bulgaria ($89.1 million, 69.3%), Turkey ($9.72 million, 7.56%), Russia ($4.3 million. 3.34%), Georgia ($2.78 million, 2.16%), and the Netherlands ($2.49 million, 1.94%) are the top destinations for Ukrainian sunflower seed exports (Observatory of Economic Complexity, 2020b).
The Russian Federation is indeed a major fertilizer exporter. It was the top exporter of synthetic fertilizers in 2020, as well as the second-largest provider of potassium and the third-largest supplier of phosphorous fertilizer. In January 2022, Russia's fertilizer exports totaled $1.53 billion, while imports totaled $8.71 million, resulting in a $1.53 billion trade surplus. Russia's fertilizer exports climbed by $1 billion from January 2021 to January 2022. (189 percent ). Fertilizers were largely sold to Brazil ($398 million), Finland ($126 million), Estonia ($110 million), the United States ($100 million), and China ($67.8 million) in January 2022 (Observatory of Economic Complexity, 2020a).
For at least 30% of the world's wheat import needs, about 50 countries rely on the Russian Federation and Ukraine. 26 countries rely on these two countries for more than half of their wheat imports. In that setting, this battle will have many ramifications for the international marketplace and food security, posing a threat to many countries, particularly low-income countries that rely on food imports and vulnerable populations.
This huge imbalance in the world food industry has shaken the global economy. Ukraine is the world's top exporter of sunflower oil, with India, one of the world's most populous South Asian nations, as its primary market. Because of Russia's attack on its eastern neighbor, India — the world's largest buyer of edible oils — has been obliged to turn to Argentina and Brazil, tens of miles away, for assistance in keeping its kitchen economy afloat. India purchased 45 percent extra soybean oil from the two largest exporters of the product during November and March than it did the previous year. This includes an almost sevenfold increase in Brazilian purchasing. After Indonesia prohibited palm oil shipments in late April to avoid domestic supply shortages, the country's reliance on South American countries has only risen (Kasturi, 2022).
Despite the dry season, Latin American countries have been attempting to increase their production limits in order to fulfill the additional demand from South Asian countries. Despite the fact that wheat cultivation is limited in Brazil due to its mostly tropical climate, the country sold more of the crop this year than it did in the entire year of 2021. Experts believe the country, which has traditionally been a net importer of wheat, has the ability for becoming self-sufficient and perhaps a net seller in the future, thanks to developments in crop technology. For the time being, Latin America's dominating economy may be able to help fill supply gaps in maize. According to a recent US Department of Agriculture estimate, Ukraine was expected to be the third-largest maize supplier, just ahead of Brazil, before the invasion. To reap the benefits of the disturbance, farmers in Argentina's lush Pampas region are growing extra sunflower seeds. The crops adapt well to dry soil and require less fertilizer, which is an added incentive considering recent chemical nutrient price increases and expectations for the dry season later this year (Elliott, 2022).
To solve the current difficulties for the world's poorest people and to limit the impact of global food insecurity, joint, international coordinated activities and policy solutions are required. (Food and Agricultural Organization of the United Nations (FAO), 2022).
References
● Elliott, L. (2022, April 18). ‘Destructive hunger’: South America’s farmers seek to head off global food crisis. Financial Times. https://www.ft.com/content/4b134651-1b88-4ad8-9756-96074db66ff1
● Food and Agricultural Organization of the United Nations (FAO). (2022, April 8). Impact of the Ukraine-Russia conflict on global food security and related matters under the mandate of the Food and Agriculture Organization of the United Nations (FAO) (CL 169/3) - World. ReliefWeb. https://reliefweb.int/report/world/impact-ukraine-russia-conflict-global-food-security-and-related-matters-under-mandate
● Kasturi, C. S. (2022, May 17). Can Brazil and Argentina satiate India’s food oil hunger? Al Jazeera. https://www.aljazeera.com/economy/2022/5/17/can-brazil-and-argentina-satiate-indias-food-oil-hunger
● Observatory of Economic Complexity. (2020a). Fertilizers in Russia. OEC - The Observatory of Economic Complexity. https://oec.world/en/profile/bilateral-product/fertilizers/reporter/rus
● Observatory of Economic Complexity. (2020b). Sunflower seeds in Ukraine. OEC - The Observatory of Economic Complexity. https://oec.world/en/profile/bilateral-product/sunflower-seeds/reporter/ukr
● Observatory of Economic Complexity. (2020). Corn in Ukraine. OEC - The Observatory of Economic Complexity. https://oec.world/en/profile/bilateral-product/corn/reporter/ukr
Comments