With the expectation of a global food crisis growing with each additional day of Russia’s war against and in Ukraine, the Leaders of the G7 moved the issue of food security to the top of the agenda, at their recent summit meeting in Elmau on 28 June 2022. It is already clear that more immediate support is required, with international institutions and intergovernmental alliances taking the lead.

In the study Ukraine’s Role in Global Food Supply: Individual Countries’ Vulnerabilitytrade expert Veronika Movchan looks at how the supply shocks from Ukraine affect the global food supply. She analyses the trade flows of six agricultural commodities for which Ukraine has become a global supplier since its independence – wheat, corn, barley, sunflower seed oil, soybeans, and poultry – and looks at 141 states that import at least one of those from Ukraine (2016-2020).

The study shows where disrupted supply chains hurt most and recommends action items to be taken and upheld on the supply and the demand side. In the EU’s vicinity, Tunisia and Lebanon are especially vulnerable to supply shocks of wheat, but Egypt is also in dire straits.

Devastating consequences in the most vulnerable countries must be anticipated

The study’s most important recommendation for action is to keep attention focused on the fact that the worst effects of the disruptions are yet to come next year – when even less new grain will enter the agricultural markets from Ukraine and prices will rise further.

The study argues that measures on the supply side should target Ukraine primarily. Agricultural commodities should be moved from storage facilities in Ukraine and secured in the facilities of its European neighbours to augment existing infrastructure, though it will by no means replace interrupted shipping routes.

With the demand side in mind, the study addresses the needs of the countries with the most vulnerable domestic markets. Those are not in Europe itself but in Africa and Asia. In the long-term, the study does not challenge the benefits of international trade and interdependency but recommends further improving the mechanisms needed to secure staple food supplies globally, tackling the needs of the most vulnerable first.

It also recommends strategically strengthening diversity of suppliers and competitive trade structures to enable the adaption and diffusion of innovations and resource-efficient processes along internationally integrated agricultural production and supply chains.

More than one-third of the 141 countries surveyed are vulnerable when it comes to farm exports from Ukraine

It is crucial to ensure accurate analysis of the evolving conditions of food security – and to provide a baseline for further strategy planning, short and long-term. Based on an analysis of trade data and the product balances of countries importing from Ukraine, the study identifies for each product and country pair the share of imports from Ukraine in a country’s domestic product supply.

The study estimates  the share of imports in domestic product supply multiplied by the share of imports from Ukraine in that country’s total imports. With this information, the author assesses each of the surveyed country’s domestic market vulnerability to export shortfalls from Ukraine because of the war.

The study also looks at countries’ global vulnerability to export shortfalls from Ukraine by measuring each country’s share of global product trade that they previously sourced from Ukraine. It is calculated by multiplying a country’s share of product imports from Ukraine by Ukraine’s share of global exports.

For instance, Ukraine’s share in global wheat exports is 8 percent. Out of this 8% share of Ukraine, Tunisia buys 5%, which equals 0.4% of global wheat exports of Ukraine. This latter value is Tunisia’s global vulnerability to export disruptions of wheat because of the war. For Egypt, the global vulnerability is higher (1.1%), as Egypt bought 14% of Ukraine’s global wheat imports (2016-2020 average).

graph: top countries importing wheat from Ukraine

While the global vulnerability can, in theory, be compensated for by diversification of supplier relations, this is challenging in a global market disturbed by shortages, millions of tons of agricultural commodities stuck in Ukraine, the deliberate withholding of exports by some and as a result, price increases.

table: domestic market and global vulnerabilities of top 15 importing countries - wheat

Why rerouting millions of tons of grain from Ukraine is a daunting logistical challenge

While Ukraine has the third largest rail network in Europe, rail transport is costlier than by sea, and capacity is limited. Ukraine moreover uses a different gauge of track than its EU neighbours – a legacy from Tsarist Russia – so at the border, goods must be transferred to other wagons, or the axles of the trains must be changed.

Either way, this takes several hours. So, on the supply side, the action plan for EU-Ukraine Solidarity Lanes rightly aims to facilitate, first and foremost, Ukrainian grain exports, which Russia is hindering by occupying harbours and blockading the Sea of Asov and the Black Sea. Likewise, a road transport agreement is recommended.

… and the ongoing reorientation of export channels is not good enough

But rail and road transport alone will not be able to solve the underlying challenge. A recent report by Ukraine’s Ministry of Agrarian Policy and Food demonstrates how the pace of exports in May 2022, despite having picked up in comparison to the catastrophic month of April 2022 – thanks to the rail, road and riverports alternatives –, has still been significantly lower than the same period in 2021. What makes matters worse is that Russia is increasingly attacking Ukraine’s rail and road infrastructure.

Strategically improving and securing infrastructure, transport corridors and waterways

The recent initiatives to improve EU-Ukraine connectivity might be read in conjunction with a previous Bertelsmann Stiftung study on Geopolitical Ambitions in the Black Sea and Caspian Region, which includes specific recommendations for strategically improving and securing infrastructure, transport corridors and waterways in the EU’s eastern vicinity, which has always been a transit region of supra-regional significance with its waterways and shipping lanes. More than ever, railways and other crucial infrastructure are a subject of regional geopolitical tensions between Moscow and increasingly China vis-à-vis the EU and its vicinity.

EU offers temporary trade liberalisation measures

While the recent EU initiative is to be welcomed, allowing for improved market access for all Ukrainian products and, lately, Moldovan agricultural products that are usually subject to tariff rate quotas when entering the EU, this will hardly be a sufficient measure of solidarity.

This is also why we have asked agricultural economist Houssem Eddine Chebbi to focus on the situation in Tunisia and look at some long-term strategic options to allow for more development of Tunisia’s agricultural potential by opening the EU’s agricultural market (study to be published in July).

Together with the present analysis of Ukraine’s role in the global food supply, the study is part of the Bertelsmann Stiftung’s project, Sovereign Europe: Strategic Management of Global Interdependence, in which we seek to raise geopolitical awareness in the EU of the challenges presented by critical economic interdependencies in the face of ever-increasing systemic rivalry with autocracies such as Russia and China.

In two previous blog posts, we already analyze the effects of Russia’s war in Ukraine, on top of the immediate and deadly consequences for its victim Ukraine:  For other European countries, shortfalls in Ukrainian and Russian agriculture production have, above all, economic implications, in countries with lower-income levels its humanitarian effects. Grain export disruptions, in particular, are threatening their ability to feed their population.

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.