Are the war in Ukraine and flour sales per customer in the EU links in a chain? The world community doesn’t take seriously forecasts like “future famine” so far. The analysts predict “hunger” riots in the poor countries. The world bread price is the matter of duration of hostilities in Ukraine.

Antonio Guterres, UN Secretary-General said in a tweet: “The war in Ukraine is already disrupting supply chains and causing the prices of fuel, food and transport to skyrocket. We must do everything possible to avert a hurricane of hunger and a meltdown of the global food system”.

Unaffordable grain

The things on the agricultural markets are going faster than being expected. Over the first week of the warfare on the territory of Ukraine, the cost of food wheat reached $500 per ton.

 “Together, Ukraine and Russia make up the majority of worldwide grain exports. The ceased exports will negatively impact the global food security and prices. Early last week May 2022 futures the Chicago Exchange increased sharply to $470 per ton. Clearly, the speculation had taken place and later the prices rolled back, but still exceed $400 per ton,” said Mariya Kolesnyk, deputy director of ProAgro Group.

Not every country can afford such expensive imports. Besides, the shipments are limited. Egypt, Yemen, Israel, Indonesia, Bangladesh, Ethiopia, Libya, Lebanon, Tunisia, Morocco, Pakistan, Saudi Arabia, Turkey have become increasingly dependent on Ukrainian and Russian wheat.

“The countries in Asia and North Africa are the first to be targeted. The certain Asian countries, suffering from drought last season, find it extremely difficult to pay for the increased prices for grain. Any rise in grain prices increases the threat of “hunger” riots. It’s noteworthy that a jump in grain price was the trigger of social unrests in Egypt and Tunisia,” said Mariya Kolesnyk

Rich countries at risk

The situation on the global agrifood market is getting more unsettling, but it’s a start. Ukraine complied with its most export obligations before the war. According to ProAgro Group, as of February 18, Ukraine exported 18 million tons of wheat and the big question is what next season will be. The EU countries are already experiencing the early signs of food crisis.

 “The early signs of food crisis have appeared in rich countries. In Germany, some retailers have started taking the drastic step of limiting the amount of flour and sugar per consumer amid ongoing fears that the war in Ukraine will cause food shortages and trigger panic buying. The world’s carryover grain stocks are insufficient, where half of them are concentrated now in China and unable to the world,” said Mariya Kolesnyk.

As the analysts of Ukrainian Agrarian Council reports, in 2021/2022 MY world export of sunflower oil amounted to 10.9 million tons, including 5.4 million tons exported by Ukraine. Therefore, not surprising this product is disappearing from the shelves of the stores, while Ukraine has the surplus sunflower oil.

European vegetable oil association, Fediol has already provided oils intended for biodiesel production to the food market because of the ceased shipments from the Black Sea region.

“Will Ukraine remain a “breadbasket” of Europe and feed 400 million people worldwide? That is a matter today. Every 10th loaf of bread in the world is baked from Ukrainian grain, every 2nd bottle of sunflower oil comes from Ukraine. Before the war, 60% of agrifood and 95% of grain went through the ports in Azov Sea and the Black Sea. Under the Russian invasion, Ukraine can export commodities exclusively through the western borders by rail and just 20k tons per day. We do this minor exports not to jeopardize the food security”, said Olena Neroba, business development manager at Maxigrain. 

The sooner the war ends, the less crop loss can be expected

Ukraine is forced to start sowing campaign with great risks. Today this is a matter not so internal food security as responsibility to the world. What are the possible areas of undersowing and crop shortfall in the current season in Ukraine?

“Considering the problems Ukrainian farmers faced, it is hard to project the sowing campaign in Ukraine. In some regions – central and western – we are more optimistic. As for other regions, forecasts are rather sad. For this, the Ukrainian Agrarian Council (UAC) talks about the looming food crisis on all possible European media platforms”, said Andriy Dykun, chairman of the UAC

Forecasts of crop losses range from 20% to 50%, but this a matted of the duration of hostilities.

“Winter wheat will be harvested, except for areas of the intensive hostilities. If the war ends in a month, which is unlikely, we will lose at least 20% of crops. In worst-case scenario the war overruns the sowing and harvesting and we risk losing up to 50% of the crop. It’s difficult to assess the area of undersowing, but the frontline areas can’t be accounted into the sowing. Even if the war stops tomorrow, it won’t be possible to plant there due to poor condition of the fields, mining and others,” said Mariya Kolesnyk.

The corn belt of Ukraine in the zone of intensive hostilities.

“Ukraine’s winter wheat yields could fall by 15% compared to recent years if fertilizers aren’t applied now. As for corn, planting is under threat. In 2021, the largest corn area were in Poltava region – 643k ha, Chernihiv – 568k ha, Sumy – 461k ha and Kharkiv region – 300k ha. The corn belt of Ukraine is occupied in fact,” said Olena Neroba.

Under these conditions, Ukrainian farmers will conduct sowing campaign with great risks.

“Currently, Ukrainian farmers are experiencing a total shortage of everything — labor, because lots of employees went to defend the country — some of them were called up for military service and others joined territorial defense forces,” said Andriy Dykun.

Despite the danger, most farmers are about to conduct sowing campaign. In coming weeks, farmers will start sowing spring crops, such as corn and sunflower, though under risky conditions. A then the matter of global food security is no longer in Ukraine. We will demine the fields next few years.  Besides, the Russian invaders deliberately target Ukrainian farm machinery and destroy farms. The international community must defend Ukraine strongly as one of the world’s most important guarantors of food security.