War Pricing

“Russia is pilfering Ukraine’s grain exports to sell for its own profit,” U.S. Secretary of State Antony Blinken said in early June. Beyond stealing grain, Moscow’s armed forces have cut off nearly all Ukrainian food exports by blockading Kyiv’s Black Sea ports, while the fighting has damaged much of Ukraine’s most fertile farmland. Before the war, both Russia and Ukraine were major global food exporters; the two countries together grew about a third of the world’s wheat supply. But as the war disrupted Ukrainian food shipments, the global prices of many basic foods started to rise sharply. High prices and shortages have since put tens of millions of people worldwide in danger of starvation, while millions more have fallen into poverty because they can’t afford to buy food staples. And the outlook is bleak: After Russia cut off Ukraine’s food exports, other key suppliers, such as India, have banned the export of wheat. How dire could this get?

Laura Wellesley is a senior research fellow in the Environment and Society Program at the London-based policy institute Chatham House, where she works on food trade, food security, and climate change. According to Wellesley, the global food crisis is only going to get worse in the short term. Ukraine’s wheat harvest is likely to fall well short of its usual volume this summer, and the country might not be able to export the harvest at all—or even find places to store it, because most silos in Ukraine are still filled with the previous harvest. And the food crisis could lead to more geopolitical unrest and conflict. Worse, Wellesley says, the emergency is likely to persist for years to come, on account of the harm done to Ukraine’s farmers. Even before the war, she says, food prices were climbing because of record droughts, climate change, and supply disruptions caused by the Covid pandemic. Ultimately, as Wellesley sees it, the food disaster isn’t a coincidental outcome of the war; it’s an intended outcome of Russian President Vladimir Putin’s strategy of using Russia’s and Ukraine’s critical food exports as weapons.

Michael Bluhm: What effects are these price spikes and shortages having?

Laura Wellesley: The short answer is that this is all very bad. We were already looking at a situation that was severe and likely to get significantly worse without a range of interventions. The global food-price index from the UN Food and Agriculture Organization [FAO] reached the highest level on record following Russia’s invasion of Ukraine.