Russia’s invasion of Ukraine is causing ripple effects far beyond eastern Europe with reverberations in the global energy and financial sectors, as well as real estate and sports. But the war in Ukraine could also have a direct impact on the plates of some of the world’s most vulnerable people.
Russia and Ukraine are top exporters of wheat and other food grains. The conflict between the two countries could trigger food shortages and drive up food inflation in countries dependent on wheat imports from Russia and Ukraine. With global food prices already at a 10-year high, these challenges could in turn put political stability in countries like Egypt, Pakistan, and Turkey at risk.
Russia and Ukraine: Two Food Grain Powers At War
Russia is the world’s largest exporter of wheat. And Ukraine — once known as the breadbasket of the Soviet Union — is the world’s fifth-largest exporter of wheat. In 2020, Russia exported nearly $8 billion in wheat products, according to the United Nations. The United States came in at a close second, followed by Canada at third, with both countries exporting over $6 billion in wheat products in 2020. Ukraine — Europe’s largest country by landmass (excluding Russia) — exported nearly $3.6 billion in wheat in 2020.
Ukraine has seen robust growth in agricultural exports in recent years. It is a big global player in the production of food grains and oilseeds, including sunflower oil. Further escalation of the war could inhibit agricultural production in Ukraine and hinder its ability to meet export demand. At the same time, importers — concerned about risk exposure and processing of payments — are shying away from sanctions-hit Russia. Last week, China — the world’s largest producer of wheat — lifted curbs on the import of Russian wheat, indicating it could perhaps replace some of Moscow’s current importers.
Egypt, Pakistan and Turkey Depend on Wheat From Russia and Ukraine
Some of the world’s top importers of wheat are heavily dependent on wheat sourced from Russia and Ukraine.
Egypt, the world’s second-largest importer of wheat, procured 60% of its imported wheat from Russia and 25.6% from Ukraine in 2020. In other words, Egypt sources over 85% of its wheat imports from these two countries that are currently at war. Similarly, Pakistan — the world’s seventh-largest producer of wheat — purchased nearly 90% of its imported wheat from Russia and Ukraine. In 2020, 64% of Turkey’s imported wheat came from Russia and over 10% from Ukraine.
All three countries have faced challenges with inflation in recent years. Inflation rates in Pakistan and Turkey are presently in the double digits, ranking among the highest in the world. Leaders of both countries have their eyes on elections expected to take place next year. For Pakistan’s Prime Minister Imran Khan, the challenges are more immediate. He could face a vote of no-confidence soon. As the political temperature rises, Khan announced a reduction in the price of oil and electric power, even as global energy prices rise and as the country is in an International Monetary Fund (IMF) program.
Egypt has rolled back subsidies under an IMF program similar to that of Pakistan, but it maintains a very expansive food subsidy program. The Egyptian government provides subsidized “baladi” bread to almost two-thirds of the population at less than a tenth of the actual cost, according to the U.S. Department of Agriculture.
Cairo says that it can rely on a strategic stockpile of wheat for nine months to offset a disruption to import supplies in the near term. The USDA projects a higher shortfall in domestic wheat production in Turkey this year. But Ankara states that it can meet demand at least until the next harvest season.
Wheat Production by Country
These are the world’s largest producers of wheat (by volume) in 2020, according to the Food and Agriculture Organization of the United Nations.
10. Turkey — 20,500,000 tonnes
9. Germany — 22,172,100 tonnes
8. Ukraine — 24,912,350 tonnes
7. Pakistan — 25,247,511 tonnes
6. France — 30,144,110 tonnes
5. Canada — 35,183,000 tonnes
4. United States — 49,690,680 tonnes
3. Russia — 85,896,326 tonnes
2. India — 107,590,000 tonnes
1. China — 134,254,710 tonnes
The World’s Top Exporters of Wheat
These are the world’s ten largest exporters of wheat (by value) in 2020, according to the United Nations.
10. Poland — $1,045,944,467
9. Kazakhstan — $1,137,139,554
8. Argentina — $2,029,493,549
7. Germany — $2,118,691,279
6. Australia — $2,698,497,952
5. Ukraine — $3,594,216,549
4. France — $4,543,879,612
3. Canada — $6,298,980,220
2. United States — $6,318,111,098
1. Russia — $7,918,294,256
The World’s Top Importers of Wheat
These are the world’s twenty largest importers of wheat (by value) in 2020, according to the United Nations.