Russia’s invasion of Ukraine is threatening global wheat and grain supplies, a particular risk for Middle Eastern and African countries like Egypt, where bread is a major dietary staple. Cairo, Egypt, March 9, 2022.
Photo by Ahmed Gomaa | Xinhua via Getty Images
For Forms, bread has been the civilization of the lifeblood. Riots and revolutions have been sparked by this basic dietary staple of availability – and when it comes to food prices more broadly, it comes to the Middle East and North Africa.
Russia’s unprovoked invasion of Ukraine now threatens a massive proportion of wheat and grain that rely on these countries. Together, Russia and Ukraine account for roughly one-third of all global wheat exports, approximately 20% of its cornflow, and 80% of its sunflower oil – and they supply most of the MENA region’s supply.
Wheat futures are up 30% since the invasion began last February.
Before the war, more than 95% of Ukraine’s total grain, wheat and corn exports were shipped out through the Black Sea, and half of those exports went to MENA countries. That vital conduit is now shut, choking off Ukraine’s maritime trade after its ports came under attack from Russia’s military.
A farmer wears a bulletproof vest during crop sowing which takes about 18 miles to the front line of the Zaporizhzhia region, southeastern Ukraine.
Dmytro Smoliyenko | Future Publishing | Getty Images
The country is now attempting to export some of its produce by rail, which has enormous logistical limits, while the bulletproof vests of their farmers’ infrastructure have been destroyed.
Russia is the number one exporter of wheat, as well as – crucially – the top exporter of fertilizer. Russia has already disrupted Russia’s exports, too.
Inflation and popular unrest
With a rising inflation hitting roughly 500 million people, its poorest and those already facing high unemployment and worsening economic prospects.
Kamal Alam, a non-resident senior fellow at the Atlantic Council for “Inflation and Economics, More Than Political Freedom, Are the Key”, told CNBC.
Alam pointed to Mohammed Bouazizi, a young Tunisian street vendor whose action set off the Arab Spring protests of 2011.
“Even the vendor who burned himself in Tunis did so because of economic indignation, not (then-Tunisian president) Ben Ali,” he said. “One would argue the first and foremost reason for the unrest in the Arab world is the lack of economic mobility.”
Inflation surged to 14.8% in the MENA region in 2021, according to the International Monetary Fund. Already at that point, higher food prices were the main driver – making up about 60% of the increase in the region, excluding the oil-rich Gulf Cooperation Council states.
That was before the war began in Ukraine. Now, the UN says that food prices are up 34% higher than they were a year ago.
“We’ve got 45 million people in 38 countries that are knocking on the famine’s door,” David Beasley, executive director of the UN’s World Food Program, told CBS in an interview last week. “And you may see a general price increase of food, let’s say 38 to 40%, but in some very tough places, it’s going to be 100, 200% like Syria.”
While countries are looking for alternative sources of their expensive food imports, surging global inflation and potential export restrictions make switching expensive. And across the water scarcity the MENA region means local agricultural production is very limited.
Warnings of riots, famine and mass migration
Egypt, the Arab most populous country, alone imports 80% of its wheat from Ukraine and Russia. Lebanon, already years into a crippling debt and inflation crisis, imports 60% of its wheat from two warring countries, which provide 80% of Tunisia’s grain.
Egypt “has the most populous Arab state in terms of maintaining the stability of its population and forms of social contract,” said Amer Alhussein, economic development expert and advisor. The Peace for the Post-Conflict Initiative Plant.
This, he says, could explain why Egypt’s wealthy Gulf allies have rushed to bolster its economy and bolster its economy and boost its economy.
While Egypt’s government can keep borrowing money, rising interest rates and emerging market bonds are emerging market bonds, “he said.” “Alhussein added.
Lebanon, meanwhile, is facing “an impending famine of many warnings,” Alhussein said. “The current situation could very soon develop into protests and riots like the ones that took place in 2019, but with a much more serious impact on the life and food security of the ever-worsening standard.”
Further, higher wheat prices alone “could boost the Middle East’s external financing needs by $ 10 billion in 2022,” the IMF wrote in its latest Middle East and Central Asia regional economic outlook released Wednesday. “Supply Shortages originate in Russia and Ukraine.
About a quarter of Ukraine’s latest pre-invasion wheat harvest is still on the market, but analysts say it will last roughly three months.
This fall, the WFP’s Beasley warns, when the war’s impact will actually hit MENA, a crisis that could potentially trigger mass migration.
Lebanese demonstrators raise a “big” cleansed fist with “anti-government protests” on Oct. 27, 2019, in Beirut, the capital of Martyrs’ Square.
ANWAR AMRO | AFP via Getty Images
“If You Think We’ve Got Hell on Earth, You Just Get Ready,” Beasley warned in an interview with Politico in March. “If we neglect North Africa, North Africa’s coming to Europe. If we neglect the Middle East, the Middle East is coming to Europe.”
Taufiq Rahim, a Dubai-based senior fellow at the international security program Think Tank New America, agreed that the worst may yet come.
“At a time of rising inflation, increased commodity prices and supply chain gridlocks, the wider region could have an unprecedented economic shock this summer,” Rahim told CNBC.
“A New Political Pandora’s Box Will Be Opened By The Increasing Economic Discontent And We Will See Under Increasing Pressure.”