The nightmare of the food crisis returns

By Chrysostomos Tsoufis

On July 29, the UN secretary general was full of joy describing the agreement between Ukraine and Russia on the smooth resumption of Ukrainian grain exports – and for which he had mediated – beacon of hope and relief in the Black Sea.

This Lighthouse since Saturday is….extinguished.

The Russians pulled out of the deal blaming Ukrainians and British for striking 16 drones at Russian ships off Sevastopol in the Black Sea.

Somehow the nightmare of the food crisis has returned and…doubles that of energy who never left us.

Europe’s description of Ukraine as a “breadbasket” is not accidental. The importance of the country to the nutrition of the planet is pivotal.

In 2021, Ukraine was the world’s 6th largest exporter of wheat and 3rd in corn and barley.

Wheat Maize Barley

Eurozone USA Eurozone

Russia Argentina Australia

USA Ukraine Ukraine

Australia

Canada

Ukraine

The list does not end here, 1st in sunflower oil, 3rd in rapeseed and 6th in rapeseed oil. It is estimated that Ukrainian grain exports in 2021 fed close to 400 million people mainly in Sub-Saharan and Northeast African countries but also in South and East Asian countries.

Whole countries depend on the crops in the Ukrainian meadows. The figures of the world food organization are characteristic as shown in the table below:

Ukraine Dependency Rate

Lebanon 63%

Djibouti 56%

Pakistan 50%

Somalia 49%

Eritrea 48%

Mauritania 48%

Libya 43%

In its models, the World Food Organization has calculated the effects of a sharp drop in Russian and Ukrainian grain exports. Such an event could to add an additional 19 million in the number of people who are malnourished.

But at the same time it will also lead to new price rise 8-22% depending on the effort and capabilities of the rest of the world’s major exporters to fill the gap that is created. Prices that are already very high with inflation in the Eurozone just a breath away from the double-digit rate.

But here we have a complete stoppage of exports from Ukraine, while Russia July and August, which are considered the first 2 months of each season, shows a decrease in its exports by 22% in grain, while in terms of fertilizers, Russia has imposed quotas until the end of the year.

Consequently , the effects may be far worse than the models of international organizations.

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