Amid no sign of an early de-escalation in the ongoing Russia-Ukraine conflict and growing anxiety among the European nations about the shortfall in the energy supply to their continent, new fears of food shortage and inflation have gripped the Arab world. The current conflict could induce severe food crisis, causing imminent hunger and famine as West Asia and North Africa (WANA) countries import around 60 % of its grains from Russia and Ukraine only.[i] According to the Food and Agricultural Organisation (FAO), Ukraine has one of the world’s most fertile soil and 45% of its exports are dominated by agriculture.[ii] Ukraine is also responsible for supplying 50% of the wheat needs of the United Nations Food Fund. [iii]
Both Russia and Ukraine are the biggest source of wheat, fertilizers and vegetable oil for the Arab countries.[iv] France and Romania are also major sources of agricultural products for the Arab states but wheat from Russia and Ukraine are preferable for the Arab market because of its high quality and low price. Over the decades, Ukraine has expanded its food market to the WANA countries and consequently many countries in the region who sought to reduce their reliance on American wheat because of cost effect factor. Since the outbreak of the military confrontation, there seems to be no regional or global initiatives to confront the looming food crisis in the WANA region and this issue merits immediate attention because 40% of the Ukraine’s wheat and corn exports are destined for the WANA region.[v].
In the case of prolonged conflict, Arab countries might be trapped in one of the worst food crises in recent decades as food supply would be hampered due to imposition of series of trade and export sanctions against Russia by western countries. Though there is no such sanction against Ukraine but shortage in energy and fertilizers and the large-scale displacement of people in the given circumstance would hamper the farming sectors in Ukraine. In addition, the military action around the Black Sea would also scuttle the supply chain which will naturally limit the food supply to the WANA countries. Further, most part of grain and oil producing region in Ukraine are in the eastern and southern part of the country where most of the Russian military action is taking place, which is preventing farmers from fertilizing their crops.[vi]
Wheat prices in WANA region reportedly increased by 50% not long after the outbreak of the conflict[vii] and this hike in food products has been the highest in last one decade, witnessed only during the Arab Uprising.[viii] Egyptians have not forgotten the 1977 bread riots when late President Sadat decided to remove subsidy on bread which was followed by large scale protest an violence in the country.[ix] The Ukraine-Russia conflict could throw more people in poverty in countries like Egypt and Lebanon where procurement and distribution of wheat and other food items are largely controlled by government. Egypt, one of the most populous countries in the region and the biggest wheat importer in the world receives around 80% of its total wheat requirements from Russia and Ukraine alone.[x] With soaring wheat prices in Egypt, there would be extra burden of worth US $ 763 million[xi] on the national budget which already provides a bread subsidy of worth US $ 3.2 billion and for the first time in three decades, government in Egypt has increased the bread price.[xii]
Turkey too like Egypt largely fulfills its wheat requirement from the Russian-Ukraine imports and it is one of the world’s most dependent country on Russia and Ukraine for agricultural commodities and according to a 2020 figure, Turkey had received 22% of its food import from Russia. [xiii] Other countries in the region like Lebanon, Libya, Tunisia, Syria, Yemen, Israel and Oman are large-scale importers of wheat from Ukraine and Russia.
Yemen and Lebanon could be the worst affected by this sudden disruption in supply chain because Lebanon depends on grain imports for the fulfillment of 90% of its requirement and 70% of this import quota comes from Ukraine only.[xiv] The country imports between 600,000 and 650,000 tons of wheat annually and 80% of which comes from Ukraine.[xv] Immediately after the outbreak of the conflict, flour disappeared from the Lebanese market and wheat prices increased by 70 %.[xvi] Agencies associated with the food imports in Lebanon reported that country is left with one and a half month quota. The explosion at Beirut port in 2020 has already destroyed the country’s main grain silos and authorities are in talks with India, Canada and the US to buy new consignments from them.[xvii] The situation in Lebanon might worsen further because the country is already in the grip of economic meltdown. It has lost 90% of its currency values in last three years[xviii], which the World Bank itself described as one of the worst economic crisis in last one and a half century.[xix]
The war-torn Yemen could face the worst as it imports half of its grains from Ukraine and Russia.[xx] There are reports that Australia has quoted for wheat supplies at US $ 600 per tonne as against the pre-war Ukraine price of US $ 225 per tonne.[xxi] Like Lebanon, Yemen too is already in the grip of its worst nutritional crisis. What makes the current conflict more terrible in terms of food supplies is that global food price had seen the rise of 22% rise last year only in 2021 which was highest since 2007.[xxii]
Governments across the region are gearing up to contain the knock-on effect by attempting to procure more food supplies from other European countries, rationing and imposing ban on export of staple including flour, pasta and lentils. Egypt has ensured that its subsidised bread program which feeds more than 70 million locals would continue. The government confirmed that it has a strategic stockpile for a period of nine months to feed 103 million people.[xxiii] In past, Egyptian Government has tried to diversify the source of its food import and bought huge quantity of wheat from Romania[xxiv] and is planning to buy six million tons of wheat form the local farmers as well. Recently Egypt had to cancel two orders in less than a week because of the overpricing due to Ukraine crisis and Egypt is also finding it difficult to get companies which would supply the required procurement on time.[xxv] Morocco, which has already increased the food prices has approved a new plan to increase the food subsidy to the tune of €350 million and also suspended custom duties on wheat imports. [xxvi]
Tunisia is also an importer of 60% of its wheat requirements from Russia and Ukraine and reportedly, their food reserves cannot last longer than June.[xxvii] According to a media report in Tunisia, in last December a cargo of wheat could not be unloaded because of the non-payment of the price as Tunisian economy is reeling under pressure because of the political instability and crash of tourism sector. Likewise, Algeria, being the second largest importer of wheat after Egypt in the African continent, has a stock sufficient for next few months only and both Algeria and Tunisia have warned against the grain hoardings.
Syria which is a food-insecure country would further slide into crisis due to ongoing conflict in the Black Sea region. Only last year, Syria had signed an agreement with Russia to import one million tons of wheat with the Russian loan[xxviii] but now one cannot predict the fate of the deal. In February 2022, government in Syria approved some stern measures to mitigate the economic and food repercussion of the conflict. The counties which are more dependent on agricultural imports like Tunisia, Egypt and Morocco are likely to suffer more as their budget would come under bigger strain because of high import charge, new inflation and possibility of reduction in food subsidy. The crisis is likely to worsen further because the food consumption would increase in the coming month of Ramadan as many families in this month go for charity work and offering food items is known to be the best charity.
Though the price rise will affect the GCC nations but not to the extent of what is being experienced by African nations like Tunisia, Morocco, Algeria, Egypt or Sudan as GCC states can bear the brunt of the hefty price rise because of their economic capability to absorb the high-price shock. One can add here that Ukraine and Russia are not only the suppliers of wheat or of vegetable oil but Ukraine alone is the major source of chicken meats for many of the Arab Gulf states. In 2020, out of eleven major importers of Ukrainian chicken meat, five were West Asian countries and UAE, Kuwait and Saudi Arabia were the biggest destination for the chicken products of Ukraine.[xxix]
Given the volatile nature of the current politics in the region and history of the Arab uprising triggered by a major food shocks in 2010[xxx] when Russia, as a major exporter of wheat, had suffered drought, and high inflation among other reasons, one cannot deny the return of similar popular discontent on the Arab streets witnessed a decade ago. The slogan, “bread, freedom and social justice” was the basic demand of Egyptian demonstration during the January 2011 revolution.
The unfolding food crisis could spark a new wave of protest and instability in the region and imminent food inflation is likely to make the regimes more vulnerable which might be forced to revisit their policies beyond the current security and geopolitical interests and evolve new economic and agricultural policies.
*Dr. Fazzur Rahman Siddiqui, Senior Research Fellow, Indian Council of World Affairs.
Disclaimer: Views expressed are personal.