Widespread drought and supply chain disruptions stemming from the war in Ukraine and the COVID-19 pandemic are impeding the global trade of grains and oilseeds—staples for billions of people across the world. In March, the United Nations Food and Agricultural Organization (FAO) warned that food prices could rise as much as 22 percentas a result of the war in Ukraine. A severe drop in exports will devastate global food security, adding as many as 13.1 million additional people to the world’s 821.6 million who are already undernourished or starving. As states grapple with the effects of climate change, war, and the ongoing pandemic, foreign and trade relations are shifting to minimize food insecurity and meet domestic demand for food, in the hopes of avoiding further cascading crises. The unexpected shock to food systems caused by the war in Ukraine underscores the urgent need for policymakers, farmers, and corporations to prepare and adapt to climate change.
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Widespread drought and supply chain disruptions stemming from the war in Ukraine and the COVID-19 pandemic are impeding the global trade of grains and oilseeds—staples for billions of people across the world. In March, the United Nations Food and Agricultural Organization (FAO) warned that food prices could rise as much as 22 percent as a result of the war in Ukraine. A severe drop in exports will devastate global food security, adding as many as 13.1 million additional people to the world’s 821.6 million who are already undernourished or starving. As states grapple with the effects of climate change, war, and the ongoing pandemic, foreign and trade relations are shifting to minimize food insecurity and meet domestic demand for food, in the hopes of avoiding further cascading crises. The unexpected shock to food systems caused by the war in Ukraine underscores the urgent need for policymakers, farmers, and corporations to prepare and adapt to climate change.
Ukraine and Russia are key exporters of staple foods
Russia and Ukraine produce almost 60 percent of the world’s sunflowers and seeds, the critical ingredients in sunflower oil, a cooking staple around the world. In 2021, Russia and Ukraine accounted for 55 percent of the global export market of sunflower oil, and the two countries are similarly important exporters of wheat, responsible for almost 30 percent of the global wheat market. While crops from Russia continue to flow for now, there is uncertainty around the delivery and payment of future cargoes. The Russian government has begun limiting exports of some products to specific countries, including the pausing of all fertilizer exports to the West, threatening the global supply of food and agricultural inputs. Ukraine, one of the world's biggest exporters of wheat and corn—a crucial component of most livestock feed—has found it difficult to engage in trade due to Russian forces’ heavy bombardment and besiegement of major ports in Odessa and Mariupol. These trade disruptions will have a wide-reaching effect: the FAO estimates that at least 50 countries—many of which are in the Middle East, Africa, and Southeast Asia—rely on Russia and Ukraine to supply at least 30 percent of their wheat. Twenty-six of those countries import over half of their wheat from Russia and Ukraine.
As a result of this ongoing supply shock, food prices are skyrocketing in comparison to 2021. The April wheat and maize indices of the International Grain Council indicate that the wheat price index is up by 61 percent, and the corn index by 32 percent, while the FAO’s March oilseed price index saw the oilseed index increase by 47 percent. Even if hostilities in Ukraine cease soon, their impact will extend into the medium and long term due to disruption of the fertilizer trade. Russia is the world’s top exporter of nitrogen fertilizer, the second-largest exporter of potassium fertilizer, and the third-largest exporter of phosphorus fertilizer. High fuel prices and trade suspensions are further disrupting the planting season, which begins in March and April in Europe and the United States, potentially reducing soil productivity and leading to reduced crop yields in the autumn.
Price and supply shocks related to the war are additionally being compounded by climate-related events, including a severe drought affecting Argentina, Paraguay, and Brazil, and warmer-than-usual temperatures in Canada. These climate shifts have, in turn, lowered rapeseed and soybean production, raising vegetable oil prices and increasing reliance on sunflower oils. In April 2022, the International Panel on Climate Change (IPCC) found that agricultural productivity is now 21 percent lower due to human-induced global warming—high temperatures and extreme rainfall are damaging soil health, while increased levels of carbon dioxide in the atmosphere and soil are reducing crop quality. These recent phenomena are part of an ongoing decline in both food quality and production as a result of climate change. Supplies of staple crops, including wheat, soy, and rice, are expected to decrease throughout the rest of the century, with an estimated 0.7–3.3 percent decrease in yield with each passing decade. Decreased agricultural productivity will make the global population more vulnerable to sudden shocks such as those caused by the war in Ukraine, particularly as many countries typically maintain only a few day’s worth of food within their own borders. In addition, maritime shipping—which accounts for around 80% of global trade by volume—is particularly susceptible to climate change impacts, including extreme weather events and sea-level rise, which may limit access to port infrastructure or delay transit times.
Trade relationships shift in the hunt for reliable food supplies
Countries fearing potential food shortages are scrambling to find alternative suppliers. While several countries, including the United States and India, have stepped up their export of grains, eleven countries are limiting or banning the export of wheat, wheat flour, barley, rye, corn, oilseeds, lentils, fava beans, and pasta. These changing trade dynamics present significant opportunities and challenges for food security moving forward, especially as global food supply chains experience increased stress as crop productivity is hampered by climate change.
Emerging trends in trade and export, by commodity:
- Wheat: As the war in Ukraine has dragged on, wheat prices have hit record highs due to disruption to Black Sea wheat shipments. To take advantage of higher prices, Brazil and India are greatly increasing exports of wheat—in both cases, surpassing their total 2021 exports in a matter of months. Kazakhstan, another important exporter of wheat, is limiting exports of the crop over the next few months. Based on current estimates, global wheat stocks are anticipated to fall by 3.1 million tons, compared to 2021. Although the global wheat stock in 2022 should be sufficient to feed the world, affordability in food-insecure countries—particularly across the Middle East and Africa—remains a challenge. If countries with large wheat stockpiles, such as the United States and China, tap into their reserves, prices could be further reduced.
- Corn: Ukrainian corn exports dropped sharply for the second consecutive month. Additionally, Serbia, another major exporter of corn, temporarily banned corn exports in March. The main foreign markets for Ukrainian corn consisted of the European Union and China, with Ukrainian corn accounting for roughly half of EU and a third of Chinese corn imports in 2021. Both markets are now purchasing corn from the United States to make up for lost imports from Ukraine. Additionally, Spain has relaxed rules on pesticides to allow live-stock feed from Argentina and Brazil. Despite lower exports of corn from Ukraine and Serbia, global stocks are expected to grow by 13.7 MT in 2022 due to record harvests in North and South America, according to the USDA.
- Oilseeds: The outlook for global oilseed production and trade is down for 2022, due to the war in Ukraine and climate-related events in South America and Canada. As a result, vegetable oil prices have skyrocketed. Additionally, two major oilseed producers— Argentina and Indonesia—have restricted oilseed exports, further limiting global supplies of vegetable oils.
- Fertilizer: Russia’s invasion of Ukraine and the sanctions that followed significantly increased the price of natural gas—a key ingredient for fertilizers. Russia and its ally Belarus, two of the world’s largest exporters of fertilizers, are limiting exports of fertilizers. At the same time, skyrocketing European energy prices have led to the closure of major European fertilizer plants. Although governments are attempting to close supply chain gaps, global supplies of fertilizer were already limited prior to the war. As a result, several countries including Brazil are exploring expanding trade relations with Iran, a leading exporter of fertilizer, which currently conducts much of its trade by barter due to sanctions.
In fragile contexts, supply chain disruption threatens humanitarian aid
Rising food prices and high delivery costs, combined with pandemic-related food shortages, are threatening humanitarian aid in fragile contexts. In March, the World Food Programme (WFP) estimated that at least 45 percent of Ukraine’s population—over 20 million people—faces food insecurity as a direct result of the war, while the United Nations High Commission for Refugees (UNHCR) calculates that almost one-fifth of the population has been displaced as a result of violence. Moreover, the FAO predicts that the war in Ukraine will lead to an additional 7.6 million undernourished people worldwide in the short term, and potentially an additional 8.1 million undernourished people long term as a result of price increases of wheat, maize, and oilseeds. At the same time, the WFP is reporting severe disruption to its ability to provide aid to food insecure communities around the world as a result of wheat and fuel price increases and trade disruptions due to the war. The organization recently announced a rise in operations costs of $23 million per month, which is likely to reduce its effectiveness and threaten the food security of people in fragile contexts such as Afghanistan, Ethiopia, Syria, and Yemen, where childhood malnutrition and death remain severe risks. The IMF has also raised concern regarding debt increases as a result of food and fuel price hikes, particularly in sub-Saharan Africa, where food costs account for 40 percent of household consumer spending, compared to just 17 percent in advanced economies.
In East Africa, high dependence on Russian and Ukrainian wheat and the impacts of climate change on local agricultural production are interacting to increase food insecurity. Farmers and pastoralists across the region are preparing for a fourth consecutive year of failed rains and high temperatures, creating some of the driest conditions in decades, and leading to crop failure and livestock deaths. These conditions have led to rising food prices and intercommunal conflict over dwindling water and pastureland across southern and south-eastern Ethiopia, south-eastern and northern Kenya, and most of Somalia. At the beginning of 2022, Oxfam estimated that 13 million people in the region were facing severe hunger, a number that has jumped to 28 million since the start of the war in Ukraine. In Somalia, where drought conditions are the worst in the region, 20 percent of the population does not have enough water to cover basic needs. These conditions are worsening pre-existing fragility caused by the ongoing conflict between the Somali government and Al-Shabaab, which has led to 2.9 million internally displaced people, and civil unrest surrounding the delayed 2021 elections.
Although droughts in the region are not uncommon, with the most recent drought period taking place in 2016 and 2017, climate change is increasing their frequency, reducing recovery periods for pasture and water point regeneration, and undermining humanitarian aid efforts. Current levels of donor funding are inadequate to mitigate these risks: humanitarian organizations called for US$4.4 billion for assistance to affected populations in Ethiopia, Kenya, and Somalia in 2022 but donors have failed to fully fund these appeals. This funding shortfall is only likely to worsen in the coming years as climatic events such as La Niña—which are the root of East Africa’s frequent droughts—increase in frequency: while only 12 La Niña events were recorded between 1954 and 1998, the same number have been recorded from 1998 until today. Droughts are likely to only become more common, leading to crop failures, and climate change has also been linked to a loss of animal productivity due to heat stress, disease, and biodiversity loss, all of which will threaten domestic food systems and increase regional reliance on food imports.
Looking ahead: the future of food security
Looking ahead: Supply chain shocks stemming from the war in Ukraine, alongside the myriad challenges caused by accelerating climate change, highlight the need for greater diversity of food production to avoid widespread food systems collapse. Global reliance on a small number of countries to produce the majority of staple foodstuffs and agricultural inputs runs the risk of widespread disruption due to unexpected extreme weather events, international crises such as war, or the long-term impacts of climate change. As yields of staple crops, such as wheat, maize, and rice, are predicted to decrease over the next several decades, the diversification of diets and food production will be vital to ensure that the global population can meet its nutritional needs, especially in under- and malnourished communities. Many countries will need financial and technical support to grow and produce staples in order to build their resilience to shocks and stressors, such as a single war or weather event, which can drastically cut off supply to essential foods.
Isabel Schmidt is a Senior Policy Analyst with FP Analytics. Her work there focuses on women and gender, older adults and vulnerable groups, and climate and security. She is a graduate of the Johns Hopkins University School of Advanced International Studies.
Miranda Wilson is a Policy Fellow with FP Analytics, Foreign Policy’s independent research and analysis division. Her work focuses on climate-related topics, including finance and resilience. She is a graduate of the Johns Hopkins School of Advanced International Studies.
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