Will the world face famine because of the Ukraine conflict?

The world is likely to have less bread on the table and might even face a food shortage with the Russia-Ukraine conflict cutting off food grain supply from the vast swathes of fertile farmlands of the Black Sea region known as the ‘breadbasket of the world’.

Russia and Ukraine account for more than a third of global grain exports and their total share of barley, wheat and corn exports over the past five years have been 19 percent, 14 percent and 4 percent respectively.

Russia is the world's third-largest producer of wheat, behind only the countries with the world's largest populations, China and India. However, Russia has a much smaller population, so much of the grain it produces is for sale. 

And since 2016, it has been the world leader in this regard. For six years in a row.

Both Russia and Ukraine are also leaders in rapeseed oil production. In terms of sunflower oil supplies, they occupy half of the global market. 

A section of experts is already predicting a doomsday scenario of starvation deaths and food riots in parts of the world as no other country can replace the wheat supplies from Russia and Ukraine.

South America is already staring at a crop failure due to unusually dry and hot weather.

How have other countries reacted?

In March, the price of wheat touched $315.1 per ton, a record in the history of commodity trading. The scary part is, it is likely to rise further.

“The price hike raised concerns about food security," Bloomberg news agency immediately noted.   It also brought back memories of a decade ago when price hikes led to food riots in more than 30 countries.

The world has already entered a food crisis, said Andrei Vernikov, head of UniCapital. 

And countries are reacting fast. Hungary and Serbia have announced export halts. Bulgaria too has slowed down the shipping of grain already purchased from it. Iraq announced an emergency purchase of three million tons.

In general, large buyers and sellers are waiting. Shipowners and carriers are also waiting: they are not ready to go to the Sea of Azov right now. And according to the Internet resource Sovecon, up to half of the exports are transported by this route. 

Overall, Russia exports about 30 million tons of wheat annually.

Why has Russia restricted exports?

 The Russian government temporarily banned grain and sugar exports, the official reason was to prevent prices from rising in the domestic market. Exports of the foodstuff are now banned to Eurasian Economic Cooperation (EAEC) countries and developing countries. 

Restrictions on grain will be in force until June 30, and on sugar, until August 31. The resolution, however, contains several exceptions—it does not apply to Kremlin ally Belarus, the breakaway regions of Ukraine, Donetsk People's Republic and Luhansk People's Republic, and South Ossetia. 

The message of the Cabinet of Ministers also specifies: "Supplies of these products outside Russia will be possible, including for humanitarian aid, as well as within the framework of international transit shipments."

However, according to Ivan Zuenko, a senior researcher at the Institute of International Studies at MGIMO, this decision by the Russian government also emphasises Russia's influence on global food security.

Experts see the Russian argument of “we need it ourselves” as a form of the sanctions imposed by the west on the Kremlin over the invasion of Ukraine.

After all, they say stopping exports from Russia would unambiguously affect world markets.

"As a result of the export ban, world prices for agricultural products may increase by 50-100%," predicts Artem Deyev, head of the analytical department of AMarkets. Many experts also admit that grain and sugar replace foreign currency in Russia. Especially now.

At the same time, the closure of exports will not affect the dynamics of sowing areas in Russia. "On the contrary, over the last few years, the area used to cultivate certain crops has only been growing. According to the Ministry of Agriculture, 81.2 million hectares of crops will be sown in Russia in 2022, 1.3 million hectares more than in 2021. Last year's sown area was 79.9 million hectares, which is 0.3 percent bigger than 2019. In 2022 the spring cereals, sugar beet, buckwheat, soybeans, and potatoes sowing will be expanded," Nezavisimaya Gazeta quoted Deyev as saying.  He also underlined that "nothing will threaten Russia's food security”.

As if to mock the world, the Ministry of Economic Development said that Russia’s food grain reserves are at 150 percent. Meanwhile, Minister of Agriculture Dmitry Patrushev announced at the March 10 meeting of the President with members of the Government that this year's grain harvest might reach about 123 million tons since crops have successfully survived the winter.

The Ministry of Agriculture expects sugar beet harvest to increase this year—up to 41.5 million tons against 38.7 million tons in 2021.

What will happen to exports from Ukraine?

Ukraine is also a serious exporter. Wheat and meslin from this country were bought by Egypt, Indonesia, China, Türkiye, Pakistan, Bangladesh, Morocco, Tunisia, and Yemen. Last year, according to the Ukrainian State Statistics Committee, exports amounted to more than 20 million tons, bringing the country $5 billion.

However, now Ukraine has banned the export of meat, sugar, buckwheat, and millet, and has introduced a special permit from the government for the export of wheat, corn, and sunflower oil. 

Therefore, traditional buyers of Ukrainian food will soon face a shortage of grains. The trouble is that these products are a staple in the diet of the middle class and low-income people. With a shortage of grain, "bread riots" and other extreme situations like the Arab Spring in the world may again become a reality, experts say.

So far, it is impossible to estimate how badly the sown fields in Ukraine have suffered. Or to assess the possibility of harvesting winter crops and sowing spring crops. It is only known that last fall, many Ukrainian farmers had sowed winter crops without fertiliser. Most likely, it will not be possible to export grain even if the war ends soon. 

The sanctions against Russia will have a greater impact on the global economy than the situation in Ukraine, says David Malpass, head of the World Bank.