In a previous blog post in March, we looked at Ukrainian and Russian agricultural production and the economic implications for Europe caused by Russia’s war in Ukraine. Two months later, Russia is still waging war and now threatening how some countries in the world feed themselves.

Both Ukraine and Russia are global players in agri-food markets. They are enormous producers of grains and other agricultural commodities, representing 53% of global trade in sunflower oil and 27% in wheat, according to UNCTAD.

Major disruptions in Ukraine’s harvests and exports

The invasion by the Russian Federation effectively started on February 24th and has caused major disruptions in Ukraine’s exports of agroproducts. Because of the war, agricultural commodities are at risk. Much of Ukraine’s most fertile soil has been turned into battlefields or contaminated by mines. While some farmworkers, supported by aid, continue harvesting and sowing, others are fleeing or fighting on the front lines.

Logistics have been interrupted, and grain and other agricultural commodities exports have been considerably reduced. Reasons are the closure of Ukraine’s seaports and the limited railway capacity as well as physical assets and infrastructure that have been damaged, including storage facilities.

Even the future 2023 harvest is at risk. An approximately 30 percent drop in sown land is expected due to occupation, active fighting and military pollution (e.g., mines). Also playing a role are logistical bottlenecks and shortages in capital, and inputs, including fertilizers. Moreover, war fatalities and injuries – both soldiers and civilians – threaten to reduce the labour supply available at least for the harvest of this season’s crops.

The war interferes with another reform success story

Ukraine’s role in global food supply has become a much more important one over the past 15 years. Ukrainian exports of agriculture and food have increased from less than 10% to over 35% of global exports during that time. For several products essential for global food security, i.e., wheat, maize or sunflower-seed oil, Ukraine, was one of the key players before the war.  Ukraine has now become the largest single source food provider to the United Nations World Food Program.

Graph: Ukraine exports

Wheat especially feeds billions of people across the globe. For countries in the eastern and southern EU neighbourhoods, it is a staple food. Some EU neighbours depend almost entirely on Ukraine and Russia for their wheat. In 2020, Ukraine was the fifth largest exporter of wheat in the world.

Ukraine food

Rising food prices and political and social upheaval are linked

In terms of global food dependencies, among the most vulnerable countries to supply shocks caused by the war in Ukraine with its global ramifications is Tunisia, the country of origin of the Arab Spring that was in part sparked by high food prices. Already one can observe signs of unrest not only in Tunisia because of rising food costs, but also in some other countries in the EU’s southern neighbourhood

Interdependence vs. resilience – The case of Tunisia

Tunisia has remained a large net importer of cereals. About 70% of the domestic cereal consumed is imported. With food prices already high because of energy costs and shipping disruptions related to the Covid19 pandemic and extreme weather events, they are now jumping even more because of the war. Tunisia’s import bill is expected to rise and its current account deficit to deteriorate further.

With a subsidy system currently in place in Tunisia, the cost of compensating for imported cereals is expected to rise sharply, and an increase in international prices is likely to result in additional budgetary pressures.

Graph: expenditure Tunisia

In terms of food security, high shares of Tunisia’s domestic need for the main imported cereals are filled by Ukraine. Of the 96% of Tunisia’s domestic needs for bread (soft wheat), 78% came from Ukraine (and 10% from Russia (2018-2020)).

Ukraine filled 44% of Tunisia’s domestic need for durum wheat (hard wheat for pasta and couscous) and 86% of its domestic need for animal feed (barley). This high dependency amplifies the risk of supply difficulties in a tense international market made unpredictable by the war.

Consumption needs of the main cereals in Tunisia (Annual average 2017-2021 in thousand tons)

In addition to Tunisia’s high dependency on imported main cereals (durum, soft wheat and barley), the war has also had a negative effect on domestic production. Tunisia has traditionally been a major producer of phosphates. Due to the disruption of the production system since the 2011 Jasmine revolution, it is currently importing 20-40% of its fertilizer from Russia.

Further supply disruptions now in fertilizer and animal feed, particularly maize and sunflower seeds from Ukraine, will certainly have an impact on yield as well as impede the production process of cereals and milk. The domino effect will eventually affect smallholder farmers, who themselves are providing more than 50% of the cereals and most of the milk and meat production in Tunisia.

Acting strategically before the war plunges millions into malnutrition and poverty

Tunisia is just one and not even the most worrying example demonstrating that the war Russia wages against and in Ukraine has the potential to affect agricultural markets on a global scale to Russia’s benefit. This will particularly be the case if Russia continues to invade and keeps the fertile south of Ukraine occupied or under attack.

Firstly, because Russia would further increase its own market power, and secondly, because it would consolidate control over important transport routes. Moreover, the more dire the food situation becomes, the more unlikely it will be that those Russian agricultural industries themselves would fall prey to Western economic sanctions.

How critical is the EU’s and other countries’ dependence on agri-commodities?

In the case of food (unlike in the case of oil and gas), it is less the EU itself that is threatened by its own dependencies; since higher-income countries can provide targeted assistance to low-income households. However, the situation in low-income, import-dependent countries is a reason for grave concern.

This is especially the case in Africa, where hunger and food insecurity are pressing issues, and the question of whether people have anything to eat at all is real. Also, the already uncertain situation is exacerbated by the fact that there is no transparency about what grain stocks China has and may bring into play.

European responses and actions have been swiftly suggested. Now it will be important to implement these judicious analyses strategically and pro-actively – to be prepared for the possibility that Russia will use food as a “quiet, but ominous weapon,” as publicly mused about by former Russian president and senior security official Dmitry Medvedev.

At the same time, there are practical measures, such as aligning Ukrainian to EU rail standards in such a way that so-called “dry ports” increase transport options via rail and thereby compensate for shortfalls via the seaports.

The considerations described above were part of an expert debate in Berlin on May 3rd, to which the Bertelsmann Stiftung had invited stakeholders from Ukraine, Tunisia, and Germany. Follow-up studies will be published on Ukraine’s role in global food supply and individual countries’ vulnerability as well as on EU options to support Tunisia by opening its agricultural market in accordance with the specificities of the Tunisian agricultural sector.

About the author

Miriam Kosmehl has been Senior Expert in the Bertelsmann Stiftung’s Europe’s Future Program since 2017 working on the Eastern Partnership region from Berlin. 

Read more about the EU and its southern neighbourhood:

Tunisia’s Democracy Experiment Put to the Test

Putin’s War Raises Europe’s Costs in its Southern Neighbourhood

Agricultural Production in Ukraine and Russia: Economic Implications for Europe

Europe’s Struggles for Influence in Africa in Light of the Kremlin’s invasion

The EU and the Middle East: Exploring alternatives to Russian Energy