UN Secretary-General Antonio Guterres said on Monday, March 14, that the war in Ukraine could cause a “hurricane of hunger in the world.” What do these statements mean and should we be concerned about them? Thierry Pouch, an agricultural economist, gives us his analysis.
Could the war in Ukraine spark waves of famine around the world?
Indeed, it is likely that there will be situations similar to the food riots followed by the Arab Springs in 2008-2011. For the already relative stability of the world, this would be explosive. You must understand that on a global scale, Russia produces 15% of wheat. It accounts for 22% of world wheat exports, making it the leading exporter of this cereal. On the other hand, Ukraine produced 33 million tons of wheat in 2021.
These are the two main suppliers to many countries such as Morocco, Tunisia, Egypt, Indonesia or Syria. If the two countries that are currently at war are completely out of the market as a supplier, we will have less volume and the price will skyrocket. On Monday, March 7, 400 euros were put up for a ton of wheat, this is already unheard of! The consequences for the population could be dire…
In Tunisia, people are starting to rise up to protest against, among other things, the lack of wheat… should we expect uprisings?
No, because the consequences will not be the same in all countries of the Mediterranean and the Middle East. It is important to distinguish between those who have oil and/or gas reserves and those who do not. Those with resources like Algeria benefit from fairly large oil revenues. Therefore, they are not too worried, because they will still have supplies until the fall.
However, Lebanon, Turkey and Egypt are at risk of suffering and possibly rising, as is Tunisia, which is 41% dependent on Ukraine for wheat. Lebanon is 51% dependent on Ukraine for wheat. Egypt and Turkey 61% each and 63% Russia and Ukraine combined. Ukraine has already decided not to export anymore in order to maintain production on its territory, and Russia is following the same path, continuing to export only to China. We may face unpredictable consequences.
What could be the solutions to prevent the collapse of the global food system in this regard?
The United States will consider subsidizing importers so they can continue to buy wheat and avoid the risk of a popular uprising at all costs. The goal would be not to increase the geopolitical instability of the moment, but this has not materialized yet.
At the same time in Europe, I think the ideal thing would be for the EU to suspend its Green Deal (a set of initiatives put forward by the European Commission with the main goal of making Europe climate neutral, editor’s note) in order to produce more. But then it will be necessary to postpone the terms of decarbonization, and the Commission does not want to come to this.
Speaking of Europe, are such famines possible, for example, in France?
In the short term, we cannot imagine this. France is self-sufficient in grains, dairy products, beef and pork, and sugar. The biggest impact we are already facing is inflation. As with petrol, the French should expect a baguette price increase of 5 or 10 centimes.
However, in the French authorities, we heard the hypothesis of taxing our wheat exports in order to keep the volumes in the territory. This will only exacerbate the problem for importing countries. Half of our world exports go to Algeria, so if we save everything, it will be stuck.