Russia’s war in Ukraine is wreaking havoc on food supplies inside and outside the country. The International Monetary Fund (IMF) warns that inflation and higher prices are likely to continue as the COVID pandemic, coupled with Russia’s invasion of Ukraine, will lead to lower economic growth this year.
“Global factors, specifically commodity and import prices, were key drivers of inflation in 2021,” IMF reports. “Our analysis suggests that these play a larger role in the [Latin America] region than in advanced economies.”
The Guardian reports that Russia and Ukraine play a pivotal role in food production because of their global agricultural strength. The two countries together supply 28% of global wheat exports.
Economic sanctions against Russia will likely squelch grain exports and raise the cost of basic foodstuffs.
“A combined 10-percentage points shock to both oil and food prices would push up inflation by 1.1 percentage points,” the IFM report states.
In January, the IMF had predicted global economic growth to stall at 4.4%, but the head of the fund said last week that its prediction would be scaled back further in new forecasts due to be published this week.
Ukraine has fought to keep its agricultural sector open during the war. In the weeks after the Russian invasion, President Volodymyr Zelenskyy called on farmers to continue planting and harvesting their fields, Zero Hedge reports.
However, this has proven to be a difficult task for some farmers, as they must circumnavigate the fallout from the war. The mass exodus of Ukrainians fleeing the invasion has resulted in a labor shortage; diesel, seeds, and fuel are in short supply; planting fields have been destroyed by bombs, and some are littered with unexploded ordinances.
Even if farmers manage to produce crops from the ground, transporting them is another problem, as roads and bridges have been destroyed. Exporters report having difficulty finding insurers for container ships daring to enter one of Ukraine’s Black Sea ports.
According to DW News, the United Nations reports that as much as one-third of Ukraine’s crops will be lost this year. UkrAgroConsult stated that the country’s crops might be half as much as in previous years.
Zero Hedge reports Ukraine remains the world’s second-largest exporter of grains. According to DW News, Ukraine exports about 10% of the world’s wheat and 12% of corn — much of it going to African countries.
Ukraine is also the world’s biggest producer of sunflower oil, accounting for 52% of all global exports in recent years, DW News reports.
