Africa bracing for food crisis as war cuts grain supply chain
Half of all African countries import more than one third of their wheat from Russia and Ukraine; for 17 countries, the share is half. Analysts now anticipate a global food crisis as a result of the war
The impact of the Ukraine conflict on economies in Africa, the Middle East, and even further afield is beginning to be understood. The complex food supply chain can expect disruption in the short term.
AFRICAN economies are bracing for a catastrophic fallout from the war in Ukraine.
The rapid report from the United Nations Conference on Trade and Development revealed that in 2020 every single tonne of wheat imported by Benin came from Russia, while all imports into Somalia came from either Russia or Ukraine.
Three quarters of Egypt’s wheat came from these exporting countries, and neighbouring Libya and Tunisia are heavily dependent on Ukraine.
One quarter of Turkey’s total imports of wheat, corn, barley, and sunflower oil and seeds come from Russia (22%) or Ukraine (3%), and even mighty China imports a similar proportion.
This rapidly evolving situation is especially alarming for developing nations. As many as 26 African countries, including some least developed countries, import more than one third of their wheat from the two countries at war. For 17, the share is over half.
On average, the report states, “more than 5% of the import basket of the poorest countries are products that are likely to face a price hike” resulting from the conflict. The share is below 1% for richer countries.
So, as Africa emerges from the pandemic, its economies will face rising food, fuel, and fertiliser prices; financial volatility; a reordering of the complex agri-commodity supply chain; and mounting trade costs.
The risk of civil unrest, food shortages, and inflation-induced recessions cannot be discounted, Unctad warned. Many African economies are already struggling with internal conflicts and precarious food security situations.
An insight piece by BIMCO, the shipowners’ association, noted that while the war’s full impact on the global economy remained unknown, prices for energy and agricultural commodities remain elevated.
It added that “a global food crisis appears unavoidable”.
“Hunger must be expected to increase in fragile developing economies that have yet to recover from the impacts of Covid-19.”
Niels Rasmussen, chief shipping analyst at BIMCO, warned that global economic growth is likely to be significantly lower than the 4%-4.5% forecast before the war.
Looking specifically at dry bulk, BIMCO observed Russia’s exports have fallen lower week by week since the invasion.
Three weeks in, exports were 25% lower than the 2022 pre-war average. Reductions appear equally spread across ports, vessel sizes, and commodities — although coal out of the Russian Far East appear to be mostly unaffected.
“Ukraine’s exports remain at a standstill,” said Mr Rasmussen.
Both Unctad and BIMCO believe that despite efforts to keep essential commodities flowing from Ukrainian ports, the dramatic slowing in exports will inevitably hit importing economies and the handymax and supramax vessels that mostly serve them.