The threat to global food supplies brought on by the Russian invasion of Ukraine could become a humanitarian catastrophe far beyond the current crisis in Ukraine (and in Russia). Too much of the world is dependent on wheat from Russia and Ukraine, and sunflower oil from Ukraine.
The current path will result in mass starvation. I do not expect this to happen, but avoiding it will bring the "West" into even greater danger of open armed conflict with Russia. I'm hoping Russia will "see reason". Let me explain.
McKinsey has an interesting article on 12 consequences of the Russian invasion of Ukraine. Possibly one of the more worrying charts is the food insecurity chart. This maps countries' dependence on Russian/Ukrainian wheat, and the percentage of calories that come from wheat. The EU27 countries are in what seems to be a 'good' position in that while 22.5% of calories come from wheat, only 1.6% of that comes from Russia/Ukraine.
Egypt must be the most worrying, with 35% of calories coming from wheat, and 54% coming from Russia/Ukraine. That's a staggering almost 20% of all calories consumed by an estimated 100 million people. Egypt will be the country to watch over the coming 6 – 12 months. I hope a solution will be found, or there will probably be serious turmoil in Egypt, spilling over across the region, possibly to southern Europe.
Not included in that chart is sunflower oil, which is also in short supply, and is already disappearing from shelves in France. What is the caloric input that sunflower oil represents? This makes me more worried about early next year, the "hungry season" of medieval Europe, when the harvest is running out and the new plantings have not grown enough to be harvested.
Egypt has to be near the top of my list in terms of places that I'm apprehensive about. How long will last year's harvest last, and the food stocks begin to run low, no matter the price? Suppose the "Strategic Reserves" level remains constant. In that case, we (and they in particular) are in big trouble when the grain shipments do not or cannot happen later this summer; also assuming that there is a reasonable harvest, in itself a debatable prospect.
Frankly, I'm becoming very worried.
Another graph, this one from "The Conversation" (https://theconversation.com/russia-ukraine-crisis-poses-a-serious-threat-to-egypt-the-worlds-largest-wheat-importer-179242) shows the magnitude of the problem that Egypt faces, remembering that 35% of calories consumed in the country of 105 million people is wheat-based. The scale is million tons of wheat. Egypt is importing 13 million tons of wheat, 11 of that from Russia and Ukraine.
Locally, Egypt is producing around 9 million tons. That 9 million metric tons of production in 2021 is the largest harvest to date, and follows most of a decade of 8 – 9 million tons of production.
Since 2015 and 2016, production has grown from 8.1 million to 9 million tons in 2021. Production will need to grow a lot faster than that to keep up even with population growth, let alone reach any government targets for the percentage of needs that are produced locally.
But the Egyptian government is making all the right noises. Al-Monitor has an article that is all happiness, with Egypt on its way to producing 70% of domestic demand. Acreage is growing (by 7% or so, not exactly the increase needed) and new variants, resistant to drought and insects are being introduced (something that does not happen in a season). (https://www.al-monitor.com/originals/2022/03/war-ukraine-pushes-egypt-ramp-wheat-production)
"Reda Mohamed Ali, head of the National Wheat Campaign at the Ministry of Agriculture and Land Reclamation, told Al-Monitor, "The current year registered the highest levels of production and supply of local wheat. The government is applying policies aimed to expand wheat cultivation and raise productivity per feddan [1.04 acres] within the scope of Egypt's Vision 2030. These policies have already begun to bear fruit, as the area planted with wheat increased by 260,000 feddans [270,000 acres] this year to reach 3,654,000 feddans [3.8 million acres]. This is in addition to an increase in productivity per acre by using and developing new varieties that are resistant to drought, insects and salinity.""
Unfortunately, these are just noises. There is little potential to dramatically increase harvests, especially in an environment in which fertiliser has risen by up to 300% in cost. If anything, there is a risk that harvests will fall considerably without adequate fertiliser.
Anyone looking at this who is not afraid is not looking properly.
No matter how much the donor world will want to donate when the crisis hits, if there is nothing to donate, then all the promises in the world will not deliver the food.
Next door to the south, Sudan is in no better shape than Egypt, with its own population of 43 million (and another 11 million in South Sudan). Is Sudan in a better position than Egypt? Roughly 21% of calories come from wheat products, of which50% are imported from Russia or Ukraine. So around 10% of the calories consumed come from warring countries. Yet all of that must pass through Egypt, who can be expected to ensure that their own people are the first to be fed.
The food crisis in Sudan will probably begin sooner than in other countries. (https://fews.net/east-africa/sudan/food-security-outlook-update/april-2022). In the maps above, from the Famine Early Warming Systems Network (FEWS NET), orange is "Crisis". The projection is that food assistance will be required through September 2022. What happens after that is anyone's guess, but without imports, there could be a very serious situation.
"An estimated 600,000 tons of locally produced wheat is anticipated to be harvested this season, approximately 33 percent below production last year and 13 percent below the five-year average. The estimated 2021/2022 harvest will likely provide around 23 percent of Sudan's annual wheat requirements."
Again, the harvests were down last year, and with the costs of fertiliser and inflation in the cost of seeds, there can be little hope of even a five-year average level of harvests this year.
At first, we in the West watching our evening news programs will not see it as a food crisis, but as civil unrest aimed at the government because of food prices. That will progress pretty quickly to news reports of starvation in areas, and international appeals for food aid. But where will it come from? With Egypt to the north (and blocking, because even the Red Sea ports require passage through the Suez Canal and Egyptian waters), there will be little hope of delivering large enough stocks to avert a humanitarian crisis.
Political instability will spread north to Egypt, and certainly will not be limited to Sudan.
What happens when food prices skyrocket in Egypt? Can the military hold the people in check? Will they be able to source enough food to feed the people, and how will they stop profiteering and the inevitable social unrest that will come with that?
A way out of this mess?
What will be the response, and what should we expect to see play out over the next three months?
First, nothing but talking until it becomes clear that there is a real danger of mass starvation, political unrest and the potential collapse of Sudan and then Egypt (and probably a few other countries along the way).
In 1981, Iraq invaded Iran starting a war that would last until 1988. In 1984, the "Tanker War" began, with each side targeting the oil tankers that were exporting the opponent's oil. Insurance premiums increased, but tankers continued to enter the Persian Gulf, fill at terminals and leave, taking oil to the world. Eventually, in 1987, to protect exports from Kuwait, Kuwaiti tankers were reflagged as US-flagged ships. This didn't stop attacks on tankers, but it did stop attacks on Kuwaiti tankers.
Anti-ship missile technology has come a long way, and the belligerents are not 'small' military powers.
Any bulk carrier that would venture into the Black Sea today would face steep insurance premiums, even if flagged as a US, UK, or EU member nation. In this scenario, Russia (and Ukraine) will need to think very hard about the potential repercussions of an attack on such a flagged vessel.
Once the food crisis reaches the level of attracting regular and systematic media coverage, I expect a number of bulk carriers (hopefully prepositioned in Turkish waters) to hoist new flags and be escorted by western warships.
This will present Moscow with a stark choice, allow Ukrainian wheat to be exported, or face being responsible for initiating hostilities directly with NATO, and as an extra bonus, be portrayed to the developing world as the cause of their hunger, starvation and unrest. Even if "the people" in the impacted countries do not know it was Russia that has caused the grain shortages, the leader of those countries will know very well who tried to feed them, and who did not.
For all his bluster, Putin does not want a war with NATO and does not want a war it cannot win without the use of nuclear weapons, as that will result in the ultimate defeat, a radioactive Russia. Russia may decide that it can continue to bluster and threaten nuclear war, but eventually, the West will be forced to challenge the blockade and export Ukraine's wheat. Russia's remaining option will be to demand that their wheat shipments be given the same priority, a demand the West may well consider worth the bargain
So, I believe the grain will flow. But it will be too late for many. There will be unrest in many countries, and it is possible that more governments will fall (Sri Lanka's government already has fallen due to higher food prices).
But mass starvation caused by Russian and Ukrainian wheat being blockaded will not be the only reason.
The world has a chance to make sure that it does not happen. Do I have confidence that the wheat will flow? I do, but then late last year most of us did not expect Russia actually to invade Ukraine. And almost none of us expected Ukraine to defend itself as well as it has.
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