Russian ships and sea mines block Ukrainian Black Sea ports. Before the war, Ukraine exported on average about 6 million tons of agri-commodities monthly to countries in the Middle East, Asia, and Africa. Currently, only about 15 to 20 percent of this volume can be exported via rail, Danube river, and trucks (about 700,000 tons in April 2022 and about 1 million tons in May 2022). Also, trade risks related to Russian exports have been increasing due to sanctions by various trade partners and banks. This led to price spikes and supply chain disruptions significantly undermining food security in poor importing countries.

Global trade of cereals except rice is a little less than 20 percent of total world production (about 620 million of about 3.3 billion tons produced in 2020/2021). Total production is sufficient to feed all 8 billion inhabitants of the world, but production in semiarid countries is less and some countries are behind their potential. That’s why trade plays an important role to balance global supply and demand. In the 2020/21 season, Russia provided 52.32 million tons (7.8 percent) and Ukraine 69.82 million tons (11.3 percent) of cereals to the world.

Ukraine also exports oilseeds (sunflower, soybeans, rapeseed) with a well-established crushing industry to produce sunflower oil. Fifty-two percent of globally traded sunflower seed and oil came from Ukraine in 2020. Currently, edible-oil supply chains are disrupted and edible-oil prices increased even higher than cereals prices. In the last weeks, the author couldn’t buy any sunflower oil in his neighborhood in Hamburg/Germany.

Global cereal and oilseed markets were tight even before the crisis due to shrinking stocks leading to upward price trends. This new supply shock led to prices almost doubling compared with two years ago. Agri-commodity market demand is inelastic—people have to eat—and this leads to dire consequences in poor importing countries. The number of people whose food supply is insecure (about 800 million) and people facing hunger (about 44 million) will most likely grow. This will result in increased poverty and threaten social stability in poor importing countries.

Read the full article about the Ukraine global food shortage by Heinz Strubenhoff at Brookings.