Ukraine is the global leader in exports of grain, sunflower oil, honey, chicken meat and other food supplies. Twenty per cent of Ukrainian wheat is used to produce bread and bakery in the countries of the Middle East, Africa and South-Eastern Asia. In addition, 20% of exported corn is supplied for Italy, Spain, and Portugal’s cattle and poultry farms.
Should the Russian invasion continue, production and exports of these commodities will become impossible. Moreover, the total share of grain exports of Ukraine and Russia makes up 29% of the global market. However, both countries would fail to maintain these exports, Ukraine due to the war started by Russian invaders on Ukrainian territory, Russia – due to applied sanctions.
How critical is the situation, and would it lead to the global market of food supplies collapse? Learn more today from Iryna Gruzynska, Head of Sector “Agriculture” of the Better Regulation Delivery Office.
Protection of vital interests of citizens and access to food, in particular, is a guaranteed priority of every country. Ukraine, like other civilised countries, on its national level, creates all conditions to provide the population with food accessibility, its quality and safety, and free access to natural resources. But unfortunately, saving humankind from hunger turned out to be an irrelevant task for Russia.
Ukraine is a world leader in production and exports of grain, legumes, and oilseeds and has top positions in the structure of imports of countries such as China, Egypt, Indonesia, EU countries, Turkey, Pakistan, Bangladesh, Morocco, Tunisia, Saudi Arabia, Korea, Libya and others. The harvest of 2021 was a record and reached more than 106 million tons. Other top positions in our exports are sunflower oil, honey and chicken.
The market is influenced by the uncertain political situation and the shipping of products in the Black Sea ports. For example, according to the Food and Agriculture Organization of the United Nations (FAO), only during the last weeks the index of grain prices has risen 3% in the previous weeks. In particular, the cost of wheat increased by 2.1% compared to the last month. If the Russian invasion continues, we will forget about food production and its export from Ukraine.
The same goes for Russian food exports. Sanctions imposed on Russia make it impossible to sign foreign economic contracts, so at least 123 countries will soon be left without their grain. Therefore, Russia has harmed itself by attacking Ukraine seems fair. Still, at the same time, the aggressor threatens the food security of the whole world: the two countries’ combined grain exports account for about 29% of the world market, and the war would prevent securing it. Moreover, given the instability of global climate conditions, it is difficult to predict the harvest level in partner countries, which also have a significant share of the food market and will not wholly replace the Ukrainian market.
The situation could provoke the collapse of global food markets. Due to Russian aggression, the civilised world will not achieve the UN Sustainable Development Goals, including “Overcoming Hunger.” The problems will consist of not only the rise in food prices but also in their shortage. It is difficult even to predict the consequences and social issues it will lead to.
What measures is Ukraine currently taking?
To balance Ukraine’s domestic food demand, the Government has banned the export of cattle, meat and edible offal, rye, oats, buckwheat, millet, sugar and salt to other countries. Automatic export licenses have been introduced to export wheat, corn and chicken meat. All other agricultural products can be freely exported.
Such restrictions are legislative instruments of regulation, which are applied in case of a significant imbalance of certain goods in the domestic market, which is essential for the vital activities of Ukraine. Thus, our country provides itself with food during the war. These actions would not contradict the norms of international obligations under the European Union and the WTO agreements if Ukraine notified the relevant Committee of the World Trade Organization about introducing such measures within 60 days.
Despite the war, Ukrainians are already preparing to begin a sowing campaign under significant threat. The agricultural food market stakeholders define April 1 as a “point of no return” – a critical date for the start of spring fields work.
According to the forecasts of BRDO experts, taking into account the transitional balances and the possibility of sowing at least 30% of the area of Ukraine, our state will be able to meet the need in domestic consumption. However, lack of resources (primarily fuel and grease lubricants which farmers gave to the military), lack of supplies of plant protection products and fertilisers, seeds, logistics problems, increased prices for resources, lack of workers and physical capacity to conduct field works may lead to a food crisis, especially in low-income countries for which Ukrainian market is the food supplier.
We call on civilised countries to mobilise all possible resources to stop Russian aggression against Ukraine. The whole world counts on the stable work of the Ukrainian agro-industrial sector, and we rely on the world’s support.
Finally, painful economic sanctions and Russia’s total isolation on the international stage are critically important. In particular, the UN body, which we have already mentioned in this text, the Food and Agriculture Organization of the United Nations (FAO), has to react and expel the Russian Federation from its membership. The main task of FAO is to fight hunger, and therefore, a country that threatens the world’s food security should not be in its ranks.