The war in Ukraine has seriously disrupted the global food supply. Large amounts of grain and sunflower seeds pile up in Ukrainian sheds. There is hardly any capacity to export these raw materials. Much infrastructure has been damaged, such as roads, railways and important ports.
The ‘grain chamber of the world’, as the country is also called, is currently unable to supply the world with food. Combined with failed grain harvests elsewhere in the world, it leads to food shortages, especially in the world’s poorest countries. Russia controls access to Ukraine’s ports and now uses this position to exercise power. Is this the beginning of a new era in international power politics?
At present, about 22 million tons of grain are stored in various warehouses in Ukraine. Usually the farmers bring their harvest to the ports by the Black Sea. The cargo is transported by ship to important markets in North Africa, the Middle East, Asia and Europe, among others. This logistics chain has been severely disrupted by the war in Ukraine and fighting in key ports. In cooperation with several neighboring countries in Europe, Ukrainian farmers are looking for alternative routes over land. However, they can not handle near as many volumes as the ports. There are simply not enough trucks, drivers and railway wagons to transport the stocks of grain and the like to other ports outside Ukraine.
Countries such as Lithuania and Romania have ports to export these raw materials. The problem is that the roads there are not adequate. There are kilometers of queues of lorries at the border posts, while Ukraine’s railway network is not suitable for transporting freight trains to other European ports due to the deviating width. This means that the cargo must be transferred to another train at the border. Not all lines on the railway network are designed for so much freight in other directions, for example railway lines that until recently were only used for regional traffic. For example, a dilapidated railway line along the Danube to the Romanian port city of Galati is now being restored to allow freight trains to pass through. Before the war, this route played no significant role.
Global food crisis threatens
This logistics puzzle is a race against time, as farmers in Ukraine do not have enough storage space to store the next crop. And it’s already a month and a half. It is also doubtful whether they can soon sow for next harvest. The agricultural land is scattered in various places with mines, ammunition and metal remains from the war. In addition, farmers have not yet been able to sell a large portion of the former crop, so they do not have enough money to sow.
There is therefore a threat of a global food crisis if a solution to the logistical problems is not found in the short term. Access to the Black Sea ports is crucial to this, and that is exactly what Putin now seems to have set out to do. Following a failed attempt to take control of Kiev, the Russian offensive has moved south in recent weeks, with the port of Mariupol as a central strategic target. On May 21, Russia managed to break through the last resistance of the Ukrainian army at Azovstal and the port city became completely in the hands of Russia.
Russian invasion focus shifts south (Source: Aljazeera)
Food as a weapon?
Putin has left no doubt about his intentions with this military operation. Shortly after the conquest of Mariupol, the Russian president proposed to let goods pass through again. On May 28, Putin said in a telephone conversation with French President Emmanuel Macron and German Chancellor Olaf Scholz that Russia will also export more agricultural products and fertilizers if sanctions against Russia are lifted. “An increase in the supply of Russian fertilizers and agricultural products will help ease tensions in the global food market. It obviously requires the lifting of relevant sanctions. “said Putin. The Russian president also wants an end to arms suppliers to Ukraine from Western countries.
Russia and Ukraine together account for about 30% of world wheat production. Russia is also a major producer of fertilizers. The country is even the second largest in the world after Canada with a market share of 20%. Belarus, which is also under Russian influence, is the third largest producer with a market share of 17%. This makes Russia a strong player in the global food market, because fertilizers are essential for maintaining global food production. In addition to an important share of global oil production, Russia also has a key role in the global food supply through its grip on Ukraine. And that means more countries could become dependent on Russia.
The global food crisis means that groceries are becoming more expensive for Western countries, but in poorer parts of the world the consequences are even more serious. There is now a threat of shortages, especially in countries that are already not doing so well economically. An example of this is Sri Lanka, which is experiencing the worst economic crisis since independence in 1948. The country no longer has the money to import goods from abroad. Fuel and medicine are scarce and expensive.
High oil prices and rising food prices have only exacerbated this situation, leaving the country dependent on foreign aid. And that help may come from Russia. The Sri Lankan government is in talks with Moscow over the supply of crude oil and fuel. Meanwhile, she is borrowing money from India to pay for these raw materials. For example, Sri Lanka paid for a shipment of crude oil from Russia with a loan from India. That country is also importing more and more cheap oil from Russia to keep the cost of living for its own people low.
Inflation in Sri Lanka explodes (Source: Trading Economics)
Lebanon, which was already struggling with very high inflation before the war in Ukraine, has also been hit hard by the current food crisis. Until recently, about 80% of total wheat imports came from Ukraine. In addition, part of the grain storage capacity was lost in 2020 in a major explosion at the port of Beirut. As a result, the country can only store grain for one month. Price increases for cereals and maize therefore have a direct effect on food prices in the country.
Other countries in the Middle East, such as Egypt, Libya, Syria and Yemen, are also heavily dependent on wheat from Russia and Ukraine for their food supply. For example, Egypt, the world’s largest importer of wheat, received 80% of its imports from these countries last year. Libya is dependent on Ukraine for 40% of its wheat imports. Due to the loss of part of Ukrainian exports, it is not so easy to find other suppliers. Especially now that world market prices have risen so rapidly, it is less favorable for countries to deviate from existing contracts. High food prices already created social unrest in the region in 2011, while food prices are even higher than they were then.
Food prices have risen to record highs (Source: FOA Food Price Index, via Statista)
Due to the devastation of the war, Syria is also dependent on Russia for its food supply. Bread was rationed because otherwise there would not be enough to feed the entire population. Last December, President Assad’s government signed an agreement with Russia to import one million tonnes of wheat this year. This agreement was financed with a Russian loan.
Some countries are heavily dependent on wheat from Russia and Ukraine (Source: Deutsche Welle)
Some countries are very dependent on wheat from Russia and Ukraine (Source: Statista)
Power politics with raw materials
The Russian invasion of Ukraine has sent shock waves around the world. The prices of energy, fuels and food have since risen sharply and have even become prohibitive for some countries. Several countries in the Middle East, Africa and Asia fear a food crisis that will lead to more social unrest. Europe fears that this will trigger a new wave of migration. Under these circumstances, Russia can play its trump card and use resources as a means of power.
Russia can supply countries with raw materials and food and attach certain conditions to it. Consider, for example, the provision of loans, provided that raw materials are paid in rubles. Just as he calls on European countries to withdraw sanctions, he can also exercise power over other countries. Russia can now enter into agreements with countries where there is a shortage of food and fuel, in return for Russian loans. That is, financial assistance, but under Russian conditions. A new era in international power politics has begun.