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  1. Home
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  5. Trade by other means – East Europe war will throw global food system into chaos
Analysis

Trade by other means – East Europe war will throw global food system into chaos

  • Samuel GeddesSamuel Geddes
  • Source: Al Mayadeen
  • 11 Mar 2022 00:06
  • 1 Shares

With Russia ranking in the first place as an exporter of wheat and Ukraine ranking fourth, it is expected that the military operation in Ukraine will cause major disruption in the global food supply chains.

  • Trade by other means – East Europe war will throw global food system into chaos
    Like the coronavirus pandemic, the war in Ukraine is precipitating a dramatic breakdown of global supply chains, exposing most countries to shortages not experienced in decades

The Russo-Ukraine war is creating a vast gap of food grains that Western states are certain to exploit to their advantage. 

Less than a week since the start of Moscow’s offensive, that Leninist adage about “decades happening within weeks” is sounding more apt than at any point in the last 30 years. Germany, under US pressure, has signalled its break in trade ties with Russia over the war and is rapidly building the infrastructure to receive massive shipments of liquified natural gas (LNG), though exactly from whom is not yet known. 

In a previous article I suggested that having such a crisis not already been underway, it might well have been created by planners in Washington and Western Europe. Though I can claim no direct evidence for this, the list of industries and markets from which Russian and Ukrainian exports have been removed should at least prompt the question; “who benefits?” 

The European economy is now beholden for its survival to the US and likely Arab energy exports, while much of the global south faces almost certain famine as hostilities and sanctions mean that both Ukrainian and Russian agricultural exports have disappeared from the global market overnight. Even if the guns fall silent before the week is out and Russo-Ukrainian agriculture is not decimated by a grinding war of attrition, the damage has been done. Prices of basic feed grains have shot to their highest levels in more than a decade.

Russia and Ukraine are the first and fourth largest wheat exporters in the world, claiming 17.7% and 8% of the world market respectively in 2020. By far the majority of their markets are in the Middle East, Sub-Saharan Africa and East Asia. Ukraine’s largest wheat customers are Egypt, Indonesia, the Philippines, Tunisia and Morocco. Egypt, the world’s largest wheat importer, is also Russia’s biggest customer, along with Turkey, Algeria, Sudan, Nigeria, Bangladesh, Yemen, and the UAE.  

Besides these two countries, the majority of the largest agricultural exporters are either in North America, Europe or Australasia. With the disappearance of close to a third of global supply, these western states will scramble to claim their market share from the Russo-Ukrainian void. 

On top of the evaporation of Russian energy and mineral exports, its loss of agricultural market share is too much of a commercial silver-lining to this crisis for western governments not to have had this at the back (or the front) of their minds. Faced with an impending global famine, most states will cling to the core capitalist countries in the hopes of riding out the storm. Meanwhile, western farmers, chemical manufacturers, and energy companies will be raking profits in to make up for the last two years of covid-induced depression.

As well as triggering a lack of basic cereals, the war is also causing critical shortages of inputs vital to the operation of the entire worldwide industrial food system. These include seed oils, key in eastern hemispheric countries in the baking of bread, and potash from Russia and Belarus which is crucial to the production of fertilizer, of which Russia is also the largest exporter. 

While North American and European producers will be pleased with their vastly increased market share, former Russian and Ukrainian customers turning to them for food security will feel the acute leverage that comes with relying on imports for survival. Even for those states whose food systems are less affected, the looming shortage of fertilizers and pesticides will hit their economies too. Those states that turn to North American and European crops and chemical products to plug the gap will face insurmountable pressures to further liberalize their economic models and open up to western economic penetration. 

Like the coronavirus pandemic, the war in Ukraine is precipitating a dramatic breakdown of global supply chains, exposing most countries to shortages not experienced in decades. A more long-term strategy than simply swapping import partners would be to begin building domestic agricultural industries within a given country or its immediate region, that do not rely on such wide-ranging and expensive (as well as ecologically destructive) inputs. 

The importers of the world would be well advised to get to work now, as former Soviet exporters are unlikely to return to the global market soon, if they return at all.

The sum total of these developments will bring only a temporary respite for the metropoles of the global economy. Such a profound destabilization of the international food order will almost certainly cause the fall of governments. Their replacements may be far less willing to lean on foreign food imports as the wheels continue to come off the train of globalization.    

The opinions mentioned in this article do not necessarily reflect the opinion of Al mayadeen, but rather express the opinion of its writer exclusively.
  • Food scarcity
  • Russia
  • Russian special military operation
  • Wheat
  • Ukraine
  • Food Security
Samuel Geddes

Samuel Geddes

Journalist

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