Russia-Ukraine war in 'breadbasket' region threatens global wheat supply

The Russian tanks and missiles besieging Ukraine also are threatening the food supply and livelihoods of people in Europe, Africa and Asia who rely on the vast, fertile farmlands of the Black Sea region — known as the "breadbasket of the world."

Ukrainian farmers have been forced to neglect their fields as millions flee, fight or try to stay alive.

Ports are shut down that send wheat and other food staples worldwide to be made into bread, noodles and animal feed. 

And there are worries Russia, another agricultural powerhouse, could have its grain exports upended by Western sanctions.

While there have not yet been global disruptions to wheat supplies, prices have surged 55 percent since a week before the invasion amid concerns about what could happen next.

If the war is prolonged, countries that rely on affordable wheat exports from Ukraine could face shortages starting in July, International Grains Council director Arnaud Petit told The Associated Press.

That could create food insecurity and throw more people into poverty in places like Egypt and Lebanon, where diets are dominated by government-subsidised bread.

In Europe, officials are preparing for potential shortages of products from Ukraine and increased prices for livestock feed that could mean more expensive meat and dairy if farmers are forced to pass along costs to customers.

Russia and Ukraine combine for nearly a third of the world's wheat and barley exports. Ukraine also is a major supplier of corn and the global leader in sunflower oil, used in food processing.

Red flag for world's largest importer

A prolonged conflict would have a big impact some 2,400 kilometres away in Egypt, the world's largest wheat importer. 

Millions rely on subsidised bread made from Ukrainian grains to survive, with about a third of people living in poverty.

Egypt's state procurer of wheat, which normally buys heavily from Russia and Ukraine, had to cancel two orders in less than a week: one for overpricing, the other because a lack of companies offered to sell their supplies.

Sharp spikes in the cost of wheat globally could severely affect Egypt's ability to keep bread prices at their current subsidized level.

"Bread is extremely heavily subsidized in Egypt, and successive governments have found that cuts to those subsidies are the one straw that should be kept off the camel’s back at all costs," Mirette Mabrouk, a senior fellow at the Middle East Institute, wrote in a recent analysis.

In nearby Lebanon, where a massive explosion at the Beirut port in 2020 destroyed the country's main grain silos, authorities are scrambling to make up for a predicted wheat shortage, with Ukraine providing 60 percent of its supply.

They are in talks with the US, India and Canada to find other sources for a country already in financial meltdown.

Africa bracing for worse

Even before the war threatened to affect wheat supplies in sub-Saharan Africa, people in Kenya were demanding #lowerfoodprices on social media as inflation eroded their spending power.

Now, they're bracing for worse.

African countries imported agricultural products worth $4 billion from Russia in 2020, and about 90 percent was wheat, said Wandile Sihlobo, chief economist for the Agricultural Business Chamber of South Africa.

In Nigeria, flour millers believe a shortage of wheat supplies from Russia would affect the price of products like bread, a common food in Africa’s most populous country.

Nigeria has taken pains to reduce its reliance on Russian grains, with farmers moving to plant more wheat fields to try to meet 70 percent of the country’s demand in five years, said Gambo Sale, national secretary of the Wheat Farmers Association of Nigeria.

The disruption can be felt as far away as Indonesia, where wheat is used to make instant noodles, bread, fried foods and snacks.

Ukraine was Indonesia's second-largest wheat supplier last year, providing 26 percent of wheat consumed.

Rising prices for noodles, in turn, would hurt lower-income people, said Kasan Muhri, who heads the trade ministry’s research division.

Ukraine and Russia also combine for 75 percent of global sunflower oil exports, accounting for 10 percent of all cooking oils, IHS Markit said.

READ MORE: Why are some countries abandoning neutrality to support Ukraine?

US, EU farmers concerned

Farmers in the United States, the world's leading corn exporter and a major wheat supplier, are watching to see if US wheat exports spike.

In the European Union, farmers are concerned about rising costs for livestock feed.

Ukraine supplies the EU with just under 60 percent of its corn and nearly half of a key component in the grains needed to feed livestock.

Russia, which provides the EU with 40 percent of its natural gas needs, is similarly a major supplier of fertiliser, wheat and other staples.

Spain is feeling the pinch both in sunflower oil, which supermarkets are rationing, and grains for the all-important breeding industry. 

READ MORE: Ukraine ripple effect: Why oil prices continue to rise