Hunger on the Heels of a Possible Ukraine Invasion
Both Russia and Ukraine are suppliers of, and markets for, major agricultural commodities. If diplomacy fails, how could sanctions and conflict affect food security—for these countries, the region, and the United States?
(For CSIS political and military analysis of the situation, please see here and here. For CSIS analysis of civilian impacts of a possible invasion, see here.)
Q1: If war breaks out, what could this mean for Ukraine and its trading partners?
A1: More than 70 percent of Ukraine’s land is dedicated to agriculture. Ukraine is the fifth-largest global exporter of wheat, and 95 percent of Ukraine’s wheat is winter wheat. Severe drought in the fall, combined with soaring gas prices, contributed to a decrease in sowing area for the wheat crop, as natural gas is not only used for heating but also for fertilizer. As farmers prepare to tend their fields, they may be left without the inputs needed to do so—or even be called to the front lines. Disruptions to the winter wheat crop—whether in terms of supply or labor—would impact income and therefore have consequences for household food security. An invasion and its consequences could mean yet another humanitarian emergency in Ukraine.
War could also mean major disruptions in port activity and road transport. Interference with transportation and logistics would not only affect the mobility of Ukrainian agricultural products within the country but delay exports from Ukraine to major trading partners.
A disruption to exports would have dire consequences for food insecurity in already-fragile countries dependent on Ukrainian grain. For example, Lebanon imports 50 percent of its total wheat consumption from Ukraine, followed by Libya at 43 percent, Yemen at 22 percent, and Bangladesh at 21 percent. For the 14 countries where Ukrainian wheat is an essential import, almost half already suffer from severe food insecurity.
Q2: What could war and sanctions mean for Russia and its trading partners?
A2: Sanctions proposed by the United States build upon the sanctions imposed in 2014. Then, economic growth “virtually stopped” due to a confluence of the restrictions and low oil prices. In retaliation, Russia imposed bans on all agricultural imports from the European Union, the largest food supplier for more than half of all Russian food imports, as well as the United States, Canada, Australia, and Norway. For Russian consumers, two-thirds of total household expenditures on food products (mostly beef and dairy) were impacted by the import prohibition.
In many ways, the countersanctions were simply the culmination of Russian food trade restrictions and an attempted transition to self-sufficiency that had been evolving for several years. Even today, Russia can entirely meet domestic demand for most grain, except rice, and still meets at least 80 percent of domestic demand for dairy products. Russia remains a net importer for fruit, some meat, and prepared food products, but these trading partners are concentrated in Asia and the Middle East, due in part to a shift catalyzed by the 2014 sanctions. It is unlikely that these trade relations would be impacted by new U.S. sanctions.
The 2014 sanctions did have consequences for some NATO allies. The sudden market restriction led to economic losses for producers, including from food lost and wasted. At that time, the European Union exported just over 35 percent of fruits to Russia, and Norway’s fish export to Russia was valued at $1.1 billion. Today, a number of NATO allies rely on Russian natural gas exports. Though not immediately linked to food products, as mentioned previously, natural gas is a key component in fertilizer. As in 2014, Russia may choose to retaliate against any newly imposed sanctions by cutting off natural gas supply to Europe. Without this key input, the United Kingdom, Germany, and other countries in the European Union could see direct impacts to agricultural supply.
Q3: What could a Russian invasion mean for food prices in the United States?
A3: The proposed sanctions on Russia and war with Ukraine would not directly affect American consumers—only a small fraction of U.S. agricultural imports are from Ukraine and Russia. However, secondary effects could take a toll.
Though improvements in household-level incomes were seen at the end of 2021, economic recovery remains precarious. Already, the United States is wrestling with high gasoline prices and with high inflation: more than half of U.S. households are reporting hardships due to the increase in prices eating away at household income. Also, supply chains remain vulnerable to Omicron variant surges, as demonstrated by high prices and empty shelves in grocery stores across the country.
Although much of what U.S. consumers are experiencing is due to Covid-19 impacts on supply chains, economic slowdown caused by war, sanctions, and their follow-on effects could translate to even higher food prices. This could decrease U.S. households’ purchasing power, forcing families to shift toward cheaper food items, often of lesser quality and nutritional value, or decreasing the quantity of food consumed altogether.
Eilish Zembilci is the program manager for the Global Food Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Caitlin Welsh is the director of the CSIS Global Food Security Program.
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