It is a patiently built mechanism that now moves like a steamroller: Russia is now openly exploiting the geopolitical nexus that constitutes control of world food – or, depending on your point of view, hunger.
A strategy rolled out in broad daylight. Initially, Russian attention focused on the grain itself. About 20 million tons remain, stuck in Ukrainian silos across the country. US Secretary of State Antony Blinken reported on June 6 “credible reports” showing Moscow looting grain and marketing it for its own benefit. According to our information, almost 500 thousand tons were stolen from Russia in the areas under its control. This action constitutes a war crime. There are also reports of forced sales locally. Russian boats containing this stolen grain were also tracked from Russian ports to the Syrian terminal in Latakia.
silos on fire. The Russians are now deliberately bombing the nervous system of the Ukrainian agrarian power. “Now there are more and more examples of bombings of grain facilities or infrastructure destined for agricultural commodities,” notes Philippe Mitko, President of Cocéral, the organization that brings together the world’s grain trade players.
On May 5 in Kyiv, a factory making grain wagons was leveled by rockets. On the same day, the Nika Tera grain terminal in the port of Nicolaiev (Mykolaiv) – the largest in Ukraine with a potential of 20 million tons a year – was destroyed, a little further south on the Black Sea the Zatoka Bridge over the Dniester River estuary was destroyed .” “This bridge is clearly not a place for the passage of weapons, it connects the Odessa Peninsula with the Ukrainian river ports of Kiliya, Izmail and Reni, and in Romania with Braila and Galati. These ports are alternative routes to bring Ukrainian wheat by barge across the Danube to the Romanian port of Costantza,” explains Philippe Mitko.
In the absence of a maritime food corridor to evacuate grain, which Westerners are trying to negotiate with a playing for the time Vladimir Putin, getting grain out of Ukraine is becoming increasingly complicated.
But there is urgency. Firstly, because the bottlenecks are making themselves felt, especially in Africa. Then because the next Ukrainian harvest is coming up. Space must be made in the silos so that it does not spoil outdoors. This would be all the more terrible since in a country where the fields are mined and 30% of the agricultural area is amputated, the harvest should be 40% lower than the previous one (33 million tons). The Grain Association of Ukraine expects exports to halve. Before the war, Ukraine was the world’s second largest contributor to the wheat trade.
For Antoine Buisson, commercial director of the French cooperative Invivo in Ukraine, the Russian strategy has two aims. “First, choking the Ukrainian economy, whose agro-industrial exports accounted for 16% of GDP in 2020 and 92% were carried out by sea. Then take control of the northern Black Sea coast to establish their dominance in commodity exports. »
Conquest by Wheat. Ukraine is being strangled, and that is why the second act of Russia’s strategy is taking place there, in exports. If a drought hits the West, Russia is on the verge of one of the top three harvests since 2016, according to US Department of Agriculture (USDA) forecasts of 81 million tons. “Its wheat exports will increase significantly, and even more so if Moscow takes over Ukrainian stocks,” analyzes Quentin Mathieu, economist for agricultural cooperation. It could potentially replace Ukraine on some targets. According to the USDA, its share of the world grain trade could rise from 16% to over 20%. Ukraine’s share would drop from 10% to 5%. »
With Ukraine out of the picture, Russia has powerful leverage to impose its terms on countries panicking at the prospect of civil unrest that will occur when wheat runs low. “This is the message Vladimir Putin conveyed to African Union President Macky Sall, who is visiting Moscow: no problem supplying wheat to any country provided it doesn’t take sides against Russia. ‘ notes Thierry Pouch, economist at the Chambers of Agriculture. Choosing Russian wheat is choosing a side.
However, many food-insecure countries will hit the wall. According to the World Food Program, if the blockade of Ukrainian ports is not lifted, 47 million people, particularly in sub-Saharan Africa, could join the 276 million already suffering from hunger.
Egypt, whose wheat imports are 60% from Russia and 25% from Ukraine, could become increasingly dependent. Like Morocco, which imports 15% of its wheat from Ukraine. And what about Indonesia, the world’s largest importer, which relies on Ukraine for 28% of its purchases? Russia, which delivers only 1%, rubs its hands. Bangladesh, Pakistan, Yemen… One by one they could fall into the Russian zone of influence. A Wheat Conquest. “We are directly witnessing a de-Westernization of agricultural trade,” notes Thierry Pouch. This Russification will have significant implications for world geopolitics. “Quentin Mathieu, he speaks of a “new Iron Curtain, this time muesli”.
“We thought Russia was on the run, it was about to teach the West a lesson in economic warfare,” analyzes Quentin Mathieu. Moscow-controlled Russian wheat prices are the lowest in the world. At $419 a ton, Russia’s abundant wheat is a loss-maker for poor countries. European wheat is $430, in limited quantities such as American or Canadian wheat is $483. Argentine wheat, which is likely to take over, is available at the prohibitively low price of $493 per ton. »
A monster. Russia benefits doubly from its growing exports. geopolitics and finance. By levying an export tax of $120 per ton of wheat, it finances its war not only with gasoline but also with grain. “Vladimir Putin has been developing this strategy since taking office in 2000, noting the deplorable state of agriculture,” notes Thierry Pouch.
Wheat production has increased from around thirty million tons to over 80 million in twenty years. “The invasion of Crimea and the sanctions that followed marked a turning point,” he continues. Far from weakening the country, they have strengthened it by pushing it into production. A year later, Russia was the world’s largest wheat exporter and has since regained near nutritional self-sufficiency. Westerners helped create a monster, they face their responsibility, but they still refuse to see it.