No man qualifies as a statesman who is entirely ignorant of the problems of wheat – The words of the ancient Greek philosopher, Socrates. Wheat and other grains are back at the heart of geopolitics following Russia’s invasion of Ukraine. Both countries play a major role in the global agricultural market. African leaders must pay attention.
There is significant agricultural trade between countries on the continent and Russia and Ukraine. African countries imported agricultural products worth US$4 billion from Russia in 2020. About 90% of this was wheat, and 6% was sunflower oil. Major importing countries were Egypt, which accounted for nearly half of the imports, followed by Sudan, Nigeria, Tanzania, Algeria, Kenya and South Africa.
Russia and Ukraine are substantial players in the global commodities market. Russia produces about 10% of global wheat while Ukraine accounts for 4%. Combined, this is nearly the size of the European Union’s total wheat production. The wheat is for domestic consumption and well as export markets. Together the two countries account for a quarter of global wheat exports. In 2020 Russia accounted for 18%, and Ukraine 8%.
Both countries are also notable players in maize, responsible for a combined maize production of 4%. However, Ukraine and Russia’s contribution is even more significant in exports, accounting for 14% of global maize exports in 2020. Both countries are also among the leading producers and exporters of sunflower oil. In 2020, Ukraine’s sunflower oil exports accounted for 40% of global exports, with Russia accounting for 18% of global sunflower oil exports.
Russia’s military action has caused panic among some analysts. The fear is that intensifying conflict could disrupt trade with significant consequences for global food stability. I share these concerns, particularly the consequences of big rises in the price of global grains and oilseed. They have been among the key drivers of global food price rises since 2020. This has been primarily because of dry weather conditions in South America and Indonesia that resulted in poor harvests combined with rising demand in China and India.
Disruption in trade, because of the invasion, in the significant producing region of the Black Sea would add to elevated global agricultural commodity prices – with potential knock on effects for global food prices. A rise in commodities prices was already evident just days into the conflict.
This is a concern for the African continent, which is a net importer of wheat and sunflower oil. On top of this there are worries about drought in some regions of the continent. Disruption to shipments of commodities would add to the general worries of food price inflation in a region that’s an importer of wheat.
Source: Reuters
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