Will Affect Food Security
With the outbreak of the Russia-Ukraine war on Feb. 24, 2022, Egypt's food security crisis now poses an existential threat to its economy. The fragile state of Egypt's food security stems from the agricultural sector's inability to produce enough cereal grains, especially wheat and oilseeds, to meet even half of the country's domestic demand. Cairo relies on large volumes of heavily subsidized imports to ensure sufficient and affordable supplies of bread and vegetable oil for its 105 million citizens. Securing those supplies has led Egypt to become the world's largest importer of wheat and among the world's top 10 importers of sunflower oil. In 2021, Cairo was already facing food inflation levels not seen since the Arab Spring civil unrest a decade earlier that toppled the government of former President Hosni Mubarak. After eight years of working assiduously to put Egypt's economic house back in order, the government of President Abdel-Fattah el-Sisi is now similarly vulnerable to skyrocketing food costs that are reaching budget-breaking levels.
The Russia-Ukraine war catapulted prices to unsustainable levels for Egypt, increasing the cost of wheat by an additional 44% and that of sunflower oil by 32% virtually overnight. Even more troublesome, the war also threatens Egypt's physical supply since 85% of its wheat comes from Russia and Ukraine, as does 73% of its sunflower oil. With activity at Ukraine's ports at a complete standstill, Egypt already needs to find alternative suppliers. A further escalation that stops all Black Sea exports could also take Russian supplies off the market with catastrophic effect. With about four months of wheat reserves, Egypt can meet the challenge. Still, to do so, Cairo will need to take immediate and decisive action, which can be made even more effective with the timely support of its American and European partners.
Catastrophic for Global Food
The war in Ukraine will shock the global supply and cost of food, the boss of one of the world’s biggest fertilizer companies has said, the BBC reported.
Yara International, which operates in more than 60 countries, buys considerable amounts of essential raw materials from Russia.
Fertiliser prices were already high due to soaring wholesale gas prices.
Conflict, Humanitarian Crisis in Ukraine Threatening Future
Global Food Security as Prices Rise.
The ongoing conflict in Ukraine has created not only an immediate humanitarian crisis but also a threat to future global food security in the form of rising prices and decreased production capabilities, speakers told the Security Council today, underscoring the need to urgently address these issues against the backdrop of Russian and Ukrainian delegations meeting for negotiations in Istanbul.
Ukraine war 'catastrophic for global food'
The war in Ukraine will deliver a shock to the global supply and cost of food, the boss of one of the world's biggest fertilizer companies has said.
Yara International, which operates in more than 60 countries, buys considerable amounts of essential raw materials from Russia.
Fertilizer prices were already high due to soaring wholesale gas prices.
Yara's boss, Svein Tore Holsether, has warned the situation could get even tougher.
"Things are changing by the hour," he told the BBC.
"We were already in a difficult situation before the war... and now it's additional disruption to the supply chains and we're getting close to the most important part of this season for the Northern hemisphere, where a lot of fertiliser needs to move on and that will quite likely be impacted."
Russia and Ukraine are some of the biggest producers in agriculture and food globally.
Russia also produces enormous nutrients, like potash and phosphate - critical ingredients in fertilisers, which enable plants and crops to grow.
"Half the world's population gets food as a result of fertilisers... and if that's removed from the field for some crops, [the yield] will drop by 50%," Mr Holsether said.
"For me, it's not whether we are moving into a global food crisis - it's how large the crisis will be."
His company has already been affected by the conflict after a missile hit Yara's office in Kyiv. The 11 staff were unharmed.
The Norwegian-based company isn't directly affected by sanctions against Russia but has to deal with the fall-out. Trying to secure deliveries has become more difficult due to disruption in the shipping industry.
Just hours after Mr Holsether spoke to the BBC, the Russian government urged its producers to halt fertiliser exports.
He pointed out that about a quarter of the key nutrients used in European food production come from Russia.
"At the same time we're doing whatever we can do at the moment to also find additional sources. But with such short timelines it's limited," he said before the news emerged.
Analysts have also warned that the move would mean higher costs for farmers and lower crop yields. That could feed through into even higher costs for food.
Nutrients aren't the only factor to consider, either.
Huge amounts of natural gas are needed to produce ammonia, the key ingredient in nitrogen fertiliser. Yara International relies on vast quantities of Russian gas for its European plants.
Last year, it was forced to temporarily suspend production of about 40% of its capacity in Europe because of the spike in the price of wholesale gas. Other producers also cut supplies.
Combined with higher shipping rates, sanctions on Belarus (another major potash supplier) and extreme weather - this prompted a big jump in fertiliser prices last year, adding to a surge in food prices.
The company says it's making day-to-day evaluations on how to maintain supply and that it is too early to say if more shutdowns may be on the cards.
It acknowledges it has a "very strong obligation" to keep production running at what it describes as a critical point.
But Yara's boss says the world must, in the long-term, reduce its dependency on Russia for global food production.
"On the one hand, we're trying to keep fertiliser flowing to the farmers to keep up the agricultural yields.
"At the same time... there has to be a strong reaction. We condemn the Russian military invasion of Ukraine so this is a dilemma and one that frankly is very difficult."
Climate change and growing populations had already been adding to the challenges the global food production system faces - all before the pandemic started.
The Yara International chief executive describes the war as "a catastrophe on top of a catastrophe", highlighting just how vulnerable to shocks the global food supply chain now is.
It will increase food insecurity in poorer countries, he adds.
"We have to keep in mind that in the last two years, there's been an increase of 100 million more people that go to bed hungry... so for this to come on top of it is really worrying."
Why the War in Ukraine Threatens Global Food Security
More than six weeks into Russia’s invasion of Ukraine, there’s no end to the conflict that has shook the world to its very core. Aside from the immense suffering caused by Russia’s aggression in the Ukraine, the war is also having major repercussions around the world, especially on food security. The head of the United Nations World Food Programme David Beasly recently warned that the war was creating a food crisis “beyond anything we’ve seen since World War II,“ leading to surging food prices and possibly shortages in many countries that rely on exports from Russia or Ukraine.
As the following chart, based on data from the Food and Agriculture Organization of the United Nations (FAO), shows, Ukraine and Russia are major producers of wheat, barley and maize, accounting for an average (combined) share of 27, 23 and 15 percent of global exports between 2016 and 2020, respectively. Even the World Food Programme itself gets 50 percent of its grain supplies from the Ukraine-Russia area and is now facing dramatic cost increases in its efforts to combat food emergencies around the world.
“This is a catastrophe on top of a catastrophe,” WFP Director Beasley said, referring to the devastating effect the Covid-19 pandemic has had on world hunger. According to the UN organization, the number of people facing acute food insecurity had jumped from 135 million to 276 million since 2019 – and that’s not even taking the conflict in Ukraine into account. In total, more than 800 million face hunger around the world, while 44 million people in 38 countries are teetering on the edge of famine, according to WFP.
The reasons for hunger and food insecurity are many and vary from country to country, but generally, it is a result of conflict, poverty, economic shocks such as hyperinflation and rising commodity prices and environmental shocks such as flooding or drought.
Water scarcity can mean scarcity in availability due to physical shortage,
or scarcity in access due to the failure of institutions to ensure a regular supply or due to a lack of adequate infrastructure.
LOSS OF BIO-DIVERSITY
WHAT IS BIODIVERSITY LOSS. Biodiversity loss refers to the decline or disappearance of biological diversity, understood as the variety of living things that inhabit the planet, its different levels of biological organisation and their respective genetic variability.
What are the 5 cause of climate change?
The main causes of climate change are: Humanity's increased use of fossil fuels
– such as coal, oil and gas to generate
electricity, run cars and other forms of
transport, and power manufacturing and industry. Deforestation
LOSS OF LIVELIHOOD
Some disasters damage
infrastructure and ecosystems
essential for income generation or otherwise remove or reduce the potential for people to earn a living.
The increase in the number of migrants can contribute to conflict in migrant receiving areas in many different ways. This ranges from competition over natural and economic resources, ethnic tensions, socioeconomic tensions and burden on infrastructure and services.
Ukraine War Threatens to Cause a Global Food Crisis
Farmers harvesting wheat last year near the village of Tbilisskaya, Russia. A crucial portion of the world’s wheat, corn and barley is trapped in Russia and Ukraine because of the war.
The war in Ukraine has delivered a shock to global energy markets. Now the planet is facing a deeper crisis: a shortage of food.
A crucial portion of the world’s wheat, corn and barley is trapped in Russia and Ukraine because of the war, while an even larger portion of the world’s fertilizers is stuck in Russia and Belarus. The result is that global food and fertilizer prices are soaring. Since the invasion last month, wheat prices have increased by 21 percent, barley by 33 percent and some fertilizers by 40 percent.
The upheaval is compounded by major challenges that were already increasing prices and squeezing supplies, including the pandemic, shipping constraints, high energy costs and recent droughts, floods and fires.
Now economists, aid organizations and government officials are warning of the repercussions: an increase in world hunger.
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Ukraine Crisis Likely to Push Up Wheat Prices.
Oil and gas prices are surging amid the Russian escalation in the Ukraine, consumers around the world are going to see the immediate effects of the crisis at the gas pump or in their next utility bill.
It doesn‘t stop there, however, as other commodity prices are also set to rise given Russia‘s role as a „commodity superstore“ in the world market, as analysts at RBC Capital Markets fittingly put it. Aside from oil, gas and several precious metals, Russia is also a major producer of wheat. According to the Food and Agriculture Organization of the United Nations (FAO), Russia produced 86 million tonnes of the popular grain in 2020, trailing only China and India.
Making things worse, both China and India consume the lion’s share of their production domestically, making Russia the biggest exporter of wheat by a significant margin. As the following chart, based on data from the UN’s Comtrade Database shows, both Russia and Ukraine are among the top 5 wheat exporters, fueling fears that the crisis could exacerbate inflation pressure in the food aisle. On Thursday, wheat futures rose to the highest level since 2008, building on top of a rally that had been going on since mid-2020.
Africa's Major Reliance on
Russian and Ukrainian Wheat
One of the most significant shockwaves to be felt outside of Ukraine since the Russian invasion isn't in Europe, but in Africa. As this infographic using Trade Map data shows, the continent's biggest sources of wheat are Russia, France and Ukraine. African economic intelligence firm Concerto estimates that Russian and Ukrainian imports account for 30 percent of all African wheat consumption. In the case of Egypt, for example, this figure is closer to 80 percent.
Speaking to Arab News at the end of February, Nader Saad, an Egyptian government spokesman said that the country has a stockpile which will supply the population with wheat for nine months, adding: “Egypt is working on a plan to import wheat from other sources instead of Russia and Ukraine, as Egypt has 14 countries approved for the supply of wheat, some of which are outside Europe”.
As Africa, and the world, prepares to deal with a significant fall in wheat supplies, prices are already rising significantly, further adding to the looming African crisis. The UN's price tracker, the FAO Food Price Index, reached a record high in February, with increases to wheat, dairy and vegetable oils driving the rise.
Kenya is another country for which a large proportion of wheat supplies come from Ukraine and Russia. As reported by Der Spiegel, Paloma Fernandes of the Cereal Millers Association in Kenya warned at the start of March: "The wheat prices have already exploded here, and millers have very little access to capital". Market vendor Beatrice Atieno summed up the current situation: "Sometimes, we go to bed hungry because life has become so expensive...Bread, especially, is something I can no longer afford to buy. We eat potatoes for breakfast instead."
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