The global food market has gone crazy. It has been a month since Russia invaded Ukraine and world wheat prices have skyrocketed and sunflower oil has become a delicacy.
The global food crisis lurking has been a threat for years. Climate change, as well as supply chain problems due to the coronavirus, had already caused shortages and rising prices.
The war in Ukraine has worsened the situation. But how much worse can things get and who has the upper hand?
War between two giants of agriculture
Staple foods around the world have become more expensive and more scarce due to the war in Ukraine.
Russia and Ukraine account for 30% of world wheat exports. The two countries are now excluded from the world market.
It is no longer possible to pay Russia for agricultural exports due to sanctions, while Ukraine has banned the export of food, such as wheat, to withstand the war.
Dozens of so-called Third and Second World countries are watching the war between Russia and Ukraine with concern.
Moreover, the longer the war lasts, the more realistic the scenario becomes that critical crops will be lost this summer.
How much worse can things get?
Even in rich countries the scenarios are ominous. In many European countries, consumers – who had barely overcome the panic of the pandemic – have started to procure food.
In several countries a ceiling or bulletin has begun to enter the markets of sunflower oil, flour and sugar. Food prices are soaring.
There are fears that Vladimir Putin will use food exports as a weapon against the West. Moscow has already blocked ships carrying goods from leaving the Black Sea and has vowed to retaliate against Western sanctions.
The occupation of Odessa would allow the Russians to control food shipments to the region.
If Putin carries out his threats, then food will become more expensive in many parts of the world, especially in the poorest countries.
Many governments are already at a dead end, as all they can do is raise prices. However, this may prove to be detrimental to the economy in the long run.
In turn, this situation can bring political and social unrest around the world.
Who has the upper hand?
Of course, Moscow is the main player in this situation, but the West can also take up arms and increase production to make up for losses from Ukraine and Russia.
The big difference, however, can be made by China, which has half of the world’s wheat in its warehouses. Analysts warn that Beijing could use its wheat stocks to win markets in Africa, Latin America and the Middle East.
The United Nations has sounded the bell of a “hurricane of hunger”, arguing that the longer the war lasts, the worse
Money Review
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