The conflict in Ukraine weighs today on world food security, due to the significant role that Russia and Ukraine play in international agricultural markets. Today, a third of the world's wheat export,
80% of sunflower oil exports, and 19% of corn exports are disrupted by the paralysis of production and transport in the Black Sea basin.
Food prices were already rising globally due to supply chain disruptions of food supply caused by the pandemic, and the conflict has further added to this. According to the Food and Agriculture Organization (FAO), because of the Ukrainian crisis, world food prices could increase between 8 and 20%, compared to their already high levels. For example, wheat prices are currently at levels not reached in ten years. Whereas prices were hovering around $220 a ton less than a year ago, within hours of the Russian invasion in Ukraine on February 22, a ton of wheat rose to more than $330.
Most countries in the North Africa and Middle East (MENA) region are particularly vulnerable to food price shocks. They are structurally dependent on international markets, in part due to their agricultural capacity which is inherently limited by geographical and climatic factors and by their demographic growth as well. Thus, the MENA region annually carries out a third of the world’s purchases of cereals, even as the region only represents 4% of the global population. Ukraine achieves almost half of its wheat exports and one-third of its corn and sunflower oil exports to MENA countries. To put this in perspective, countries such as Morocco, Turkey, Iran, Saudi Arabia, Israel, and Jordan import between 10 to 15% of their wheat from Ukraine. Furthermore, Egypt, Tunisia, Oman, and Yemen also import from 25% to 35% of their wheat from Kyiv and for Libya this number stands at 50% and for Lebanon at 65%.
Even countries that do not depend on Ukraine or Russia for their agricultural imports risk seeing the prices of food items increase, due to a rise in fuel prices and a reduction in the supply of fertilizers (as last year Russia was the leading exporter of nitrogen fertilizers and the second largest supplier of potash and phosphorus fertilizers). In a context where moderate or severe food insecurity already affects one in three inhabitants in the Arab world, the growth of this food inflation weighs on the purchasing power of households and on the national budgets, especially in countries where food is subsidized. In early March, around 500 people took to the streets of Nasiriyah, in southern Iraq, to protest against food inflation. In Ouled, in Tunisia, citizens attacked a heavyweight truck and stole large quantities of semolina and flour. These two examples, among many others, testify of rising tensions in the region.
The Arab country most exposed to the unavailability of cereals is the largest importer of wheat in the world: Egypt. The country has imported 210 million tons of wheat since the turn of the century, 80% of which comes from the Black Sea region. Egyptians consume between 150 to 180 kg of bread per capita, more than double the global average. The bread subsidy, which concerns two-third of Egyptians, and the price cap placed on bread from independent bakeries are economically unsustainable for the government but socio-economically essential to preserve social peace. The Egyptian government is also considering other sources and suppliers of wheat. However, in comparison to China, which buys half of the world's reserves of cereals, Egypt hardly measures up.
Qatar, Saudi Arabia, and the United Arab Emirates have pledged up to $22 billion, in the form of central bank deposits and investments to help Egypt deal with the effects of the war in Ukraine. Through this support, the Gulf countries want to avoid a rebellion in Egypt, recalling the bread riots in 1977 in the main Egyptian cities, the hunger riots in 2008 and the Arab Spring in 2011. These latest protest movements also took place in a context of rising prices and started in Tunisia, before spreading to the whole region, from North Africa to the Middle East. In this respect, the French President announced on March 24 the will of France to set up the Food and Agriculture Resilience Mission (FARM), within the framework of the French Presidency of the Council of the European Union and with the G7 countries. This foresees the provision of short to medium-term responses to agricultural and food shocks witnessed since the eruption of the Ukraine war. The European Commission has also presented on April 6 a €225 million support package to support the people in the MENA region. Thus, it would be appropriate for the announced policy and support initiatives to be complementary and effective in the field of food aid and the successful functioning of agricultural trade.
History has shown us that when a population is hungry and already faces several inequalities, it revolts. However today, there is no guarantee that the events will be repeated. The Arab populations, worried by previous instances, are rushing to buy food supplies, but it is still too early to talk about food shortages. Societies have evolved since the Arab Spring and the ability to withstand shocks are not the same today. Egypt has, for example, a more solid financial base than in 2011 and if the flows from Ukraine are blocked, Russia continues to export wheat to Arab countries as part of its foreign policy in the region. However, no one can predict where the rise of prices will stop because even if the disruptions in the supply chains resolve quickly, problems will most likely persist because the conflict destroyed infrastructure and equipment, necessary for future harvests in Ukraine. As such, we have to remain attentive to the food issue in these countries because if the mechanisms for protecting individuals against inflation does not take hold, the protests could intensify.