The war in Ukraine is sending shockwaves around the world, reports the Swedish magazine Syre. One of all the effects is sky-high wheat prices and extremely high prices for fertilizers.
Ukraine is one of the world’s largest exporters of wheat, as is Russia, which is now subject to extensive sanctions. When the two stock exchanges in Chicago and Paris closed, the price of wheat had risen to record levels, 40 and 29 percent respectively in one week. At the same time, future harvests in Ukraine are threatened, when labor has to pull out of the army.
Sharply increased prices and more hunger
“There are great risks with this development, poor countries with large cities will notice sharply increased prices and we will see more hunger.”
Madeleine Fogde, Program Director of SIANI and Senior Project Manager at SEI.
Madeleine Fogde believes that it will be extra noticeable for poor countries with decades of strong urbanization behind them like Indonesia, the Philippines, Bangladesh, and Egypt. Countries that import large quantities of wheat from Ukraine at the same time as decades of heavy urbanization have made parts of the population particularly vulnerable, as they can no longer contribute to their own food supply.
Factors affecting food security worldwide
According to the news agency Reuters, Egypt is now investigating whether the country can change trading partners due to unsafe transport from Ukraine. The EU is one of the alternatives. But the war, sanctions, export bans and more expensive production due to higher diesel prices are not the only things that risk affecting food security worldwide.
The price of fertilizer is now also rising. Russia, together with Belarus, is a giant in the global market for phosphorus and potassium – two important raw materials to produce fertilizers.
Higher prices for fertilizer and smaller harvests
According to Madeleine Fogde, higher prices for fertilizer can be managed by Swedish farmers and consumers – although this can also lead to smaller harvests, higher food prices and that individuals are hit hard.
For this year’s growing season, most Swedish farmers have already bought fertilizer. But the Norwegian company Yara, which is one of the world’s global players in the fertilizer market, writes in a press release that there are no short-term solutions, and that one of the consequences could be that only “the privileged part of the world has access to enough food.”
Food security uncertainty is increasing worldwide
“We will see more hunger. Although many African countries cannot afford mineral fertilizers, it can be important for countries such as South Africa that produce food for the entire region.”
Madeleine Fogde, SIANI Program Director and SEI Senior Project Manager.
A similar message is given by the German Agriculture Minister Cem Oezdemir ahead of a special G7 meeting on the food situation in the world recently.
“The supply of food in Germany and the European Union is secure, but major shortages can be expected in some countries outside the EU, especially where shortages already exist due to problems such as drought,” he said in a statement.
Even before the war, UN’s ambition to eradicate hunger by 2030 was met with setbacks. Last year, the annual report from the Global Network against Food Crisis (GNAFC) showed that food security uncertainty is increasing worldwide and that the number of people in need of emergency assistance was the highest in five years.
“The pandemic has contributed to increasing the number of hungry people,” Madeleine Fogde said.
Major UN meeting on agriculture and food security
In the long run, she hopes that the development can be turned for the better. Following a major UN meeting last year focusing on agriculture and food security, many countries have paved the way for them to be able to secure the supply of nutritious food. Plans Madeleine Fogde now hopes will become a reality, driven by the increasingly uncertain world situation.
“But the change will take time and it will be difficult,” she said. In Sweden, she hopes that the high prices of fertilizers can speed up the transition to a more circular agriculture, something that would both make agriculture less vulnerable and reduce environmental problems such as eutrophication. “I think it will drive development and innovation,” Madeleine Fogde concluded.
This article was first published here on Syre on March 9, 2022.
English translation and editing by Ylva Rylander, Communications Officer at Stockholm Environment Institute for SweDev.