Sharply increased prices and more hunger

Ukraine is one of the world’s largest exporters of wheat, as is Russia, which is now subject to extensive sanctions. As a result of the war, the price of wheat in Chicago broke records even though the increase has now stalled. However, the world has not seen such high prices since the food crisis in 2008. At the same time, future harvests in Ukraine are threatened after losing its labour supply to military service.

SEI’s Madeleine Fogde believes that it will particularly affect poor countries with decades of strong urbanization behind them such as Bangladesh, Egypt, Indonesia and the Philippines. Countries that import large quantities of wheat from Ukraine combined with decades of heavy urbanization have made parts of the population particularly vulnerable since they can no longer contribute to their own food supply.

Factors affecting food security worldwide

According to Reuters, Egypt is now investigating whether the country can pivot to new trade partners due to unsafe transport from Ukraine. The EU is one of the alternatives. However, 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.

Higher prices for fertilizer and smaller harvests

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.

According to 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 reduced purchasing power.

For this year’s growing season, most Swedish farmers have already bought fertilizer. However, the Norwegian company Yara, one of the world’s global players in the fertilizer market, wrote 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 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,” said Fogde.

A similar message was given by German Agriculture Minister Cem Özdemir ahead of a special G7 meeting on the food situation in the world recently.

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 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,” 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 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,” said Fogde.