The global food supply chain is a complicated system. Farmers, producers, transporters, warehouses, retailers, restaurants and consumers all contribute to the functionality and flow. External forces can have profound impacts on the process, as seen with the COVID-19 pandemic. And blockers in the flow of food around the world can have disastrous effects on communities facing food insecurity. We’re seeing this happen on a global scale with the current wheat shortage.
How the Russia-Ukraine Conflict is Impacting the Supply Chain
One of the big disruptors to the global supply chain this year has been the war in Ukraine. Initiated by Russia in late February, the conflict has continued into the summer. Blockades and sanctions are impacting the global supply of two major food products produced in Ukraine and Russia: wheat and sunflower oil.
As the two biggest exporters of wheat and sunflower oil in the world, the conflict between Russia and Ukraine is being felt worldwide. According to a report published by the United Nations, Russia and Ukraine “ranked amongst the top three global exporters of wheat, maize, rapeseed, sunflower seeds and sunflower oil” in 2021.
While the production of products like wheat in Ukraine and Russia were favorable in the winter of 21/22, existing supply has been unable to leave the region due to conflict, blockades and sanctions. The harvest season, which begins in July and runs through December, will likely continue in Ukraine, but farmers have nowhere to store or transport their grains.
90% of the 5 million metric tons of grain that Ukraine would export before the war moved through the Black Sea. Russian aggression and blockades at vital ports like Odessa have made it impossible for Ukraine to move their grains out of port cities on the Black Sea. Ukraine’s infrastructure depends on these waterways to export the majority of their goods.
In Russia, wheat and sunflower oil exports are limited by economic sanctions. While Russia is still exporting grains and oils, a number of countries around the world have set sanctions on Russian goods which make it expensive and difficult for their products to be purchased worldwide.
Additionally, the conflict will likely impact next year’s production of wheat. In both Russia and Ukraine, farmers may lack crucial supplies to plant the next crop. With nowhere to store their harvests, Ukrainian farmers will be left with rotting crops and may lack the labor needed to plant next year’s harvest. In Russia, seeds and fertilizers typically imported from the EU will hinder Russian farmer’s ability to plant.
Supply Chain Shortages for Producers and Consumers
The impact of the wheat shortage is having a detrimental impact worldwide. For many countries in the Middle East and Africa, imports of wheat from Russia and Ukraine make up over 50% of total wheat shares. The shortage is driving up the price of wheat and leaving lower income consumers across the world hungry.
The shortage has some consumers and producers turning to different grain sources. Cassava flour is popular for gluten-free food options and is an effective alternative to traditional wheat flour. For those who require wheat flour for food products, the cost of the wheat shortage has been passed onto consumers. Wheat prices have been fluctuating since April.
A major takeaway from the wheat shortage is the need to diversify global food supply. With single countries or regions dominating the production of crucial crops, we will likely continue to see food shortages anytime a particular region is affected. This is more and more important as the climate crisis affects food production worldwide.
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