The Russian-Ukrainian war threatens food security in the Arab world

Flag of Ukraine in wheat fields (Photo by Shutterstock)
In this article, Ahmad Abdel-Rahman looks at how the Russian invasion of Ukraine threatens food security in several Arab countries.

The continuing war in Ukraine after the Russian invasion raises fears of a food crisis in several Arab countries. Even though Ukraine is geographically far from the Arab world, the impact of the Russian attack on Ukraine could be harsh, especially if this war extends for a long period.

So far, the conflict has led to the suspension of Russian trade with most other countries, and sanctions have been imposed.

The Arab countries collectively import 60 per cent of their grain needs from Russia and Ukraine, in addition to France and Romania. However, Russia and Ukraine are especially important in supplying the Arab world because of their relatively low price.

The figures show that Ukraine is the fourth largest exporter of wheat and maize in the world. Ukraine alone exported 17 per cent of the amount of corn and barley that was marketed for world trade in 2020, 40 per cent of it to Arab countries, while Russia is a major exporter of wheat to Egypt, according to a study published by the Union of Arab Banks

As a consequence of the war, it is likely that the price of grains will increase - although countries in the region will probably source these foods from elsewhere. Not only can the Arab world no longer rely on these countries for its food security, it is also likely that living standards in some Arab countries will fall, which could lead to more anti-government protests.

But it does seem that the governments in the region are aware of the danger threatening them, and are trying to race against time to take proactive steps to protect them.

The Russian invasion threatens instability in some Arab countries

This war, especially if prolonged, will make it harder for many families in Arab countries, including in Egypt, Lebanon, Yemen, Jordan, Syria and Tunisia to juggle household expenses. The Middle East Research Institute, based in Erbil, Iraq, has warned that "if the war disrupts wheat supplies" to the Arab world, which depends heavily on imports for its food, "the crisis may lead to new demonstrations and instability in several countries".

Yemen, which is already suffering from what was the world's worst humanitarian disaster, is facing even more tragedy. Not only are people starving, but they will suffer more because of the country's heavy reliance on grains from Russia and Ukraine, the executive director of the World Food Program in Yemen, David Beasley, said to Agence France-Presse (AFP). The implications of the current situation are numerous, he said: "We thought we had reached the bottom, but no, it's worse. We get half of our grain demands from Russia and Ukraine. This war will have a tragic impact."

As for Lebanon, which has been facing a stifling economic crisis since about 2018, the lives of its citizens may become even worse.Head of the syndicate of Wheat Importers in Lebanon, Ahmed Hoteit, told AFP: "We currently have five ships at sea loaded with wheat, all from Ukraine. The current stock, in addition to the five ships, is sufficient for only a month and a half." He added: "Lebanon imports between 600,000 and 650,000 tonnes [wheat] annually, 80 per cent of which is from Ukraine."

Lebanon's situation is made worse because the 2021 explosion destroyed the silos used for storing grain.

In Morocco, where grain prices were rising before the outbreak of the Ukrainian war, the government has increased flour subsidy allocations to 350 million euros for its citizens and eliminated customs duties that were previously imposed on wheat imports.

However, Tunisia is not able to increase grain subsidies, because its debt is rising amidst dwindling foreign reserves. In 2021, foreign debt stood at 100 per cent of GDP. Last December, some ships refused to unload their cargo of wheat because the government could not pay for it, according to AFP.

Tunisia imports 60 per cent of its wheat from Ukraine and Russia, and has enough stocks until June, Abdel Halim Kassemi, an official of the Ministry of Agriculture said.

In Algeria, which is the second largest consumer of wheat in Africa and the fifth largest importer of cereals in the world, it has a stockpile  for six months only. 

Egypt  bought 3.5 million tonnes of wheat in mid-January, according to S&S Global. And even though Egypt began buying wheat from other suppliers in recent years, especially Romania, in 2021 it still imported 50 per cent of its wheat from Russia and 30 per cent from Ukraine. The Egyptian government has a "strategic stockpile that will suffice the country for a period of nearly nine months" to feed 110 million people, according to the Egyptian Ministry of Supply and Internal Trade.

Why do Arab countries choose to import Ukrainian and Russian wheat?

Many Arab countries choose to import Russian and Ukrainian wheat because of its "low price". Tunisian financial analyst Nader Haddad of Société Générale. said in a statement to France 24: "This low price will rise a lot if you go to the US or Canada and also Latin American countries to buy it". The main reason cited for this is distance, which means the high oil price will significantly push up the price of transportation.

Haddad added that the only answer for the governments of Arab countries who import from Ukraine and Russia is find alternatives to them. He said that they must start negotiations with other countries on new contracts to supply wheat.

The Gulf countries too, are threatened by a crisis in their food resources imported from Ukraine and Russia, specifically meat and grains, according to Ayham Kamel, head of the Middle East and North Africa (MENA) department at Eurasia Group, a research institution headquartered in New York. This should not have any impact on their food security. However, unlike some countries, they should be able to absorb any price increases. In an interview with Reuters, Kamel considered that these countries "have the ability to absorb a higher cost of imports if prices rise" thanks to their financial capabilities.

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Sunday, 25 September 2022