World Only Has 8-Week Supply Of Wheat Left, Expert Tells UN
UNITED NATIONS - A food insecurity expert has told the United Nations Security Council that the world only has a 10-week supply (now 8-week supply) of wheat left stored and that global food insecurity has now reached levels that haven't been seen since the 2008 financial crisis.
Sara Menker, who is the CEO of agriculture analytics firm Gro Intelligence, told the United Nations Security Council that although the Russian war on Ukraine is not the cause of the food security crisis, it "simply added fuel to a fire that was long-burning".
"We currently only have 10 weeks of global consumption sitting in inventory around the world. Conditions today are worse than those experienced in 2007 and 2008" Menker stated.
"It is important to note that the lowest grain inventory levels the world has ever seen are now occurring while access to fertilizers is highly constrained. And a drought in wheat-growing regions around the world is the most extreme it's been in over 20 years. Similar inventory concerns also apply to corn and other grains".
Ukraine's deep seaports located in the Black Sea allow it to have easy access to international markets, along with the fact that Ukrainian farmland is cheaper to operate than in Europe and the United States, Ukraine is known as one of the world's 'breadbaskets'.
While Ukraine is the 5th largest exporter of wheat in the world, Russia is the world's largest wheat exporter, accounting for around 24% of the top 20 largest exporters of wheat. Both Russia and Ukraine together account for around a third of the world's wheat exports.
On March 14th, 2022 the Prime Minister of the Russian Federation, Minister Mikhail Mishustin signed decree 362, banning the export of Russian wheat to wheat, meslin, rye, barley, and maize to the countries within the Eurasian Economic Union (EAEU), except for Belarus.
The temporary Russian ban extends to ex-soviet countries from March 15th to August 2022, with a noted exception that states, "An exception to the ban is granted for exports in the form of humanitarian aid and for supplies under export licenses issued by the Ministry of Industry and Trade, within the export quota".
The Russian government said that the measures were adopted in order to "protect the domestic food market in the face of external constraints".
Russian wheat exports are reported to be down by 45% since the beginning of July due to a small crop, taxes on grain exports, and a grain quota of 11 million tons of grain and 8 million tons of wheat from February 15th to June 30th.
Russia says that the over 10,000+ sanctions that have been placed on their country as a result of their invasion of Ukraine have disrupted routes and kept Russian vessels from being able to deliver their goods, as well as disrupted commercial transactions due to issues with banking. U.S Secretary of State Antony Blinken however says that these claims by Russia are false.
"The decision to weaponize food is Moscow’s and Moscow’s alone. Sanctions aren’t blocking Black Sea ports, trapping ships filled with food, and destroying Ukrainian roads and railways; Russia is. Sanctions are not emptying Ukrainian grain silos and stealing Ukrainian farm equipment; Russia is" Blinken stated.
Blinken said that the sanctions that have been imposed on Russia aren't preventing Russia from being able to export food and fertilizers due to the fact that there is an exemption on the sanctions regarding food exports, fertilizers as well as seeds. "we’re working with countries every day to ensure that they understand that sanctions do not prevent the flow of these items".
He also said, "The Russian government seems to think that using food as a weapon will help accomplish what its invasion has not - to break the spirit of the Ukrainian people".
Meanwhile, UN food chief David Beasley told the Security Council that Russia's war on Ukraine has created an "unprecedented crisis" and escalated food prices, which is already causing protests, riots, and growing hunger.
The executive director of the World Food Program says that 49 million people in 43 countries are already "knocking on famine’s door"."We are already seeing riots and protesting taking place as we speak — Sri Lanka, Indonesia, Pakistan, Peru. We’ve seen destabilizing dynamics already in the Sahel from Burkina Faso, Mali, and Chad. These are only signs of things to come" he stated.
Beasley spoke to world leaders asking them to do everything possible "to bring the markets to stability because things will get worse".
Menker gave 5 reasons for the current global food insecurity crisis: Lack of fertilizer, the drought conditions, cooking oil shortages, grain shortages, supply chain, and logistical bottlenecks.
The lack of fertilizer, Menker said is caused by supply chain issues, restrictions on natural gas, and export restrictions due to the Russian war on Ukraine. The price for fertilizer has quadrupled over the last two years, she said and the shortage could reduce crop yields significantly for large suppliers such as the United States, Brazil, and western Europe later this year and even into next year "severely impacting global food security and inflation for three-to-five years at a minimum".
Menker said that drought conditions have also been a factor contributing to the global food crisis, saying that drought conditions for 'major breadbaskets' such as the United States and Brazil are the worst they've been in 20 years globally.
Speaking on the cooking oil shortage, Menker said that the price of palm oil has almost tripled in the last two years, that the world has lost about 75% of its sunflower oil exports due to the war in Ukraine, and that China has notably increased the amount of cooking oil than it imports.
Regarding grain shortages, both Russia and Ukraine together accounted for a total of a third of the world's wheat exports before the Russian war on Ukraine started. Fertilizer shortages, along with low grain levels have caused droughts and supply chain issues.
Lastly, supply chain issues resulting from the global COVID-19 lockdowns together with the logistical bottlenecks created as a result of the Russian war on Ukraine. "All Ukrainian ports remain closed, making it impossible to move any of Ukraine’s harvested grain across its borders" Menker stated. "Shifting to rail will move less than 10% of the pre-war flow. It’s not enough".
"It’s a once-in-a-generation occurrence that can dramatically reshape the geopolitical era. We cannot solve food insecurity on a national scale anywhere. While the next few years will likely be difficult, we can coordinate a global response," Menker concluded.