“Serious Threats” to Global Food Security, While 2022 Grain Harvest in Ukraine Could Fall by 55%

Bloomberg writers Jasmine Ng and Claudia Maedler reported today that, “Global food security faces ‘serious threats’ from a combination of soaring prices, fertilizer shortages and a potential loss of production due to the war in Ukraine, according to Syngenta Group.

“Even before the war, the world was already in a food crisis as prices of staples surged and hunger was on the rise.”

About 400 million people are dependent on Russia and Ukraine for food due to their significant roles within the global food supply chain, according to Syngenta.

Bloomberg writer Alonso Soto reported yesterday that, “The Spanish government will allow rationing of some products by retailers, as part of broad measures to cushion the economic impact of the war in Ukraine.

“Stores will be allowed to temporarily limit ‘the number of goods that can be bought by a client,’ according to the rule published in the Official Gazette Wednesday. The government didn’t name any specific type of products that could be affected.”

Soto explained that, “Ukraine is the main supplier of corn and sunflower oil to Spain, providing 30% and 60% of imports respectively, according to Madrid-based economic consultancy Afi. Madrid has eased grain import rules to increase supplies from Brazil and Argentina.”

And Melissa Eddy and Raphael Minder reported in today’s New York Times that, “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. Global food and fertilizer prices are soaring as a result: Since the invasion last month, wheat prices have increased by 21 percent, barley by 33 percent and some fertilizers by 40 percent.

“Supermarket shelves in Germany yawn empty where stocks of flour and sunflower oil normally stand, as consumers have snapped up more than their share in anticipation of potential shortages.

“Germany’s Agriculture Ministry sought to assuage fears of food shortages on Wednesday, pointing out that the country is largely self-sufficient in producing wheat. But the ministry acknowledged that prices for food were rising, driven by an increase in prices for energy and fertilizer.”

The Times article stated that, “In recent weeks, Spanish supermarkets have at times run out of items, like sunflower oil, that are usually imported from Ukraine and Russia.”

Dow Jones writer Kirk Maltais reported yesterday that, “Corn for May delivery rose 1.6% to $7.38 a bushel on the Chicago Board of Trade Wednesday as peace talks fail to end a conflict threatening global grain supplies.”

Meanwhile, Reuters News reported today that, “Russia plans to increase its export quotas for nitrogen and complex fertilisers, its economy ministry said in a statement on Thursday.

“Russia is a major producer of potash, phosphate and nitrogen containing fertilisers – key crop and soil nutrients. It produces more than 50 million tonnes a year of them, 13% of the global total, and exports to Asia and Latin America.

“In November, Moscow decided to limit exports of nitrogen fertilisers and complex nitrogen-containing fertilisers for Dec 1-May 31 to help curb any further increase in food prices amid higher gas prices.”

The Reuters article noted that, “The quotas will be raised by 231,000 tonnes for nitrogen fertilisers and by 466,000 tonnes for complex fertilisers, the ministry said in a statement.

“The measure will help to increase exports of these products and at the same time secure sufficient amount of the crop nutrients for domestic farmers, it added.”

And a separate Reuters article from yesterday reported that, “Belarus will allow companies to export potash fertiliser in response to Western sanctions, Tass news agency said on Wednesday, citing a government decision. It did not give details.

“State-owned Belaruskali is one of the world’s largest producers of potash.”

Also yesterday, Reuters writer Jonathan Saul reported that, “Ukraine accused Russia on Wednesday of planting mines in the Black Sea and said some of those munitions had to be defused off Turkey and Romania as risks to vital merchant shipping in the region grow.

“The Black Sea is a major shipping route for grain, oil and oil products. Its waters are shared by Bulgaria, Romania, Georgia and Turkey as well as Ukraine and Russia.”

And Reuters writers Natalia Zinets and Luiza Ilie reported yesterday that, “Ukraine is in talks with Romania on shipping its farming exports via the Romanian Black Sea port of Constanta, as Russia’s invasion has blocked off Ukrainian ports, Ukraine’s agriculture ministry said in a statement on Wednesday.”

“Romania’s agriculture ministry confirmed the talks over how to help Ukraine deliver its exports through Constanta port ‘as soon as possible,'” the Reuters article said.

With respect to production prospects, Reuters writer Pavel Polityuk reported today that, “Ukraine’s 2022 grain harvest could fall by 55% to 38.9 million tonnes due to a sharp decrease in sowing and harvesting areas caused by the Russian invasion, the APK-Inform agriculture consultancy said.”