By Nicholas Pritchard
The Russian invasion of Ukraine could have severe effects on food supplies in the Middle East. Faced with higher costs and potential supply shortages, states are already turning to alternative sources for wheat and other food staples.
Russia and Ukraine supply a huge amount of the world’s grain imports. Each year, an estimated 12% of the world’s grain passes through the Bosphorus. More than 50% of Ukraine’s wheat exports go to the Middle East and North Africa. Egypt, the world’s largest importer of wheat, imports at least 70% of its wheat from Russia and Ukraine.
Russia launched an invasion of Ukraine in the early hours of Thursday morning. President Vladimir Putin said the “military operation” in the Donbas region aimed to “de-Nazify” Ukraine. Since the invasion was announced, reports suggest multiple locations across Ukraine have been targeted. Thousands of vehicles have been seen leaving the capital Kyiv. Air-raid sirens have been heard as far west as Lviv.
“If Black Sea ports become unnavigable for shipping, prices of grains could increase and affect huge portions of the MENA region. “The rising tensions between Russia and Ukraine have pushed away some demand from Middle Eastern countries,” Sampad Nandy, S&P Global Platts Agriculture Editor, told Al Bawaba.
“In January, Iraq had bought significant volumes of wheat from Australia. Importers in the Middle East region have also been enquiring about Argentinian wheat. Argentina had emerged as a major supplier of wheat in the current marketing season on the back of its large crop. Middle Eastern nations, such as Egypt and Turkey, are also expressing interests in wheat originating from Germany, Romania, and France,” Nandy added.
In the short-term, the increase in prices could lead to a rise in the cost of living for millions in the MENA region. Earlier this month, Hesham Abuldahab, a member of the Cairo chamber of commerce, told Middle East Eye, “Egypt will be deeply affected in case the war erupts between Russia and Ukraine… Most of our wheat imports come from these two countries.”
“We are hearing export prices of wheat originating from Black Sea region could slightly rise in the near term if the tensions continue or escalate further. However, a sharp increase is unlikely as demand for Black Sea wheat may be muted,” Nandy told Al Bawaba.
“But the tensions in the region are likely to boost prices of wheat originating from alternative locations like Australia, Argentina, and Europe. Australia and Argentina are looking at record wheat production in the 2021-22 marketing year with ample exportable surplus available. With global wheat supply already tightening due to poor outlook in the US and Canada, volatility in the Black Sea region is likely to lead to a rise in wheat prices across locations.”
There could be other implications for the Middle East if violence escalates in Ukraine. Yemen, Syria and other states that rely on international aid might see resources strained as aid budgets are stretched across a growing number of crises. The UN estimates that 2022 will see record demand for aid. A new conflict on an already strained system will have consequences around the world.