Food prices: how countries are using the global crisis to gain geopolitical power
Food Prices

Twenty million tonnes of grain are currently stuck in Ukrainian silos, exacerbating the global food crisis sparked by Russia’s invasion of the country. Aside from the need to get the grain onto world markets, freeing up storage space will be crucial to make room ahead of the country’s next harvest season.

Current negotiations between Russia and the Turkish government to ensure safe passage of the grain are focused on establishing an export corridor. The aim is to encourage Russia to lift its blockade of Ukraine’s ports, with the Turkish navy providing an escort for ships to transport this grain through the Black Sea.

As with vaccine diplomacy efforts seen during the COVID-19 pandemic, governments are now jostling to satisfy global demand with a limited amount of increasingly expensive food. But some countries are going a step further than ensuring food is available to their own citizens, hinting at a new era of food diplomacy being used to bolster both old and new alliances.

Food prices in May 2022 were down 0.6% from April but still 22.8% above the same month last year, according to the monthly food price index of the UN’s Food and Agriculture Organisation. Recent research shows three quarters of people in the UK are worried about the cost of food.

The situation is even worse in many lower-income countries. The war in Ukraine is expected to increase existing food insecurity and drive hunger in some parts of the world to the highest levels this century.

Food supply chains have been severely disrupted by the war because both Russia and Ukraine are large suppliers of key agricultural products like wheat, barley and sunflower oil. It is also expected to have a lasting impact on global trade in food.

Moving food supplies out of Ukraine is not easy, however. Prior to the war, 90% of this cargo left Ukraine by sea, but the Russian occupation of Ukraine’s sea ports has blocked this export route. The EU has stepped up support for transport by road, rail, and river barge, but moving 20 million tons of grain would take 10,000 river barges or up to 1 million large trucks. Border crossings by road are slow and moving freight by train is complicated by different railway gauges in Ukraine’s neighbouring countries.

Grain being loaded into the holds of a sea cargo vessel in Odesa, Ukraine, ODESSA, August 9 2021. Shutterstock

Solving the food crisis

Even if issues around international agreements, availability and capacity of cargo ships and crew, and insurance issues are solved, a food crisis will not be completely avoided. The Ukrainian Grain Producers Association expects that the 2022 grain and oilseed harvest will be down by nearly 40% from 2021 levels. This, together with the potential impact of drought and high input prices on agricultural production in many countries, will have devastating consequences for the world’s food supply.

Fertilisers and grains are not in shortage, but prices and political, logistical and financial difficulties make it challenging to ship large quantities to low-income importers. In poor countries, grains and fertilisers will become unaffordable for the population and will limit domestic production. The food crisis is also affecting wealthy countries, with the EU reconsidering the timeliness of its ambitious “Farm to Fork” reform strategy.

In light of these challenges, many producing countries have banned exports of food. In late May, 10% of calories on the global markets were under export restrictions. This is reminiscent of bans on the export of COVID-19 vaccines in 2021.

Amid a deadly wave of infections, India focused on vaccinating its own population with domestically produced vaccines rather than supplying them to the world. There were also tensions between the UK and the EU over disputes about vaccine distribution.

Vaccine nationalism in 2021 might now be followed by food nationalism. The COVID-19 vaccines were distributed in a very uneven way, with vaccination rates in low-income nations far behind those in the richest countries. As wealthier nations look to shore up their food supplies, similar inequities could arise.

Countries exported shipments of vaccines during the COVID-19 pandemic, often to bolster relations with other regions. Shutterstock

Diplomatic weapons

In 2021, vaccine nationalism led to vaccine diplomacy. Countries exported their COVID-19 vaccines to bolster relations with certain regions. For example, both China and the USA implemented extensive vaccine programmes in Central and South America.

Before its ban, India provided vaccinations to regional partners like Bhutan. China and Russia showed an early dominance in vaccine diplomacy, while western nations were accused of hoarding.

Similarly, 2022 has seen the rise of food diplomacy, making agricultural supply chains just as political as those for oil and gas. Restricted supplies and high demand mean that countries and blocs with a food surplus must decide where to export vital commodities. India has had requests for its wheat supplies from Bangladesh, Egypt, and the UN’s World Food Programme, for example.

When jostling for influence in a region, food exports can become a diplomatic instrument in the form of “food power”. Just as the EU is keen to address expected shortages in the Middle East and North Africa to shore up its influence in the region, for instance, China is supporting African countries facing food crises.

Meanwhile, there is also a battle for control over the narrative on food shortages. Accusations of weaponising food are being levelled at Russia, while China has been both the accused and accuser when it comes to food hoarding fears. The chair of the African Union, Senegalese president Macky Sall, has also blamed western sanctions for supply chain issues.

As major world powers blame each other for their role in driving the current crisis, distributing a limited amount of food to meet global demand will be a defining issue of 2022.

Sarah Schiffling, Senior Lecturer in Supply Chain Management, Liverpool John Moores University and Nikolaos Valantasis Kanellos, Lecturer in Logistics, Technological University Dublin

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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