Farms.com Home   Ag Industry News

War in Ukraine leading to global food shortages

War in Ukraine leading to global food shortages

Ukraine and Russia are big suppliers of wheat to over 50 countries—and the war threatens their socio-economic livelihood, too.

By Andrew Joseph, Farms.com; Photo by Aleksandr Eremin on Unsplash taken in Donetsk, Ukraine

Maximo Torero, Chief Economist of the United Nations Food and Agriculture Organization (FAO) said that the invasion of Ukraine by the Russian Federation will create a major food crisis.

Due to the ongoing effects of the global Covid-19 pandemic, the war could tip our global food system into the disaster area.

In an interview with the Guardian, Torero said: “We were already having problems with food prices. What countries are doing now is exacerbating that, and the war is putting us in a situation where we could easily fall into a food crisis.”

While food prices have been on the rise since the latter half of 2020, wheat prices recently hit record highs—though have since dropped slightly.  

Why? Both Russia and Ukraine provide 30 percent or more of wheat to 50 other countries, and that supply has been effectively choked off. Developing countries in Africa, Asia and the near east are seen as being most vulnerable by the FAO.

Ukraine and Russia are big suppliers of ag foods, and the invasion affects the global supply of wheat, corn, and sunflower oil.

Ukraine is the largest producer of sunflower oil—the sunflower has become a symbol of Ukraine during the war—and supplies 12 percent of the world’s wheat—at least it did before the invasion. Just before the war, Ukraine had managed to deliver out two-thirds of its wheat for export, but the remaining grain has been blocked from shipping.

The war also will prevent Ukraine farmers from planting this Spring, even if they do manage to plant, if the war continues longer into the growing season, it could stop farmers from caring for their crop, and eventually from harvesting.

Both countries are also big suppliers of various nitrogen fertilizers, already having reached double or triple the costs in 2022 relative to 2021.

With sanctions against the Russian Federation and Belarus, and Ukraine effectively blockaded, it means fewer foods and fertilizer for everyone. It is also possible that Russia will divert its resources to countries it feels “less threatened by”, such as China, who could purchase Russian agri-foods and supplies for resale to other countries at an increased cost.

It’s supply and demand, and farmers need fertilizers to grow food, and consumers need food.


Trending Video

Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?


Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.