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Ukraine is the breadbasket of Europe and the surrounding regions of the Middle East and North Africa. Without grain supplies from Ukraine and nearby Russia, food could become scarce and unaffordable in the region. Heba Saleh and Emiko Terazono report for the Financial Times:
Russia’s invasion of Ukraine has made life even harder for Fadia Hamieh, a Lebanese university lecturer who was already struggling to make ends meet in a country with a failing economy.
Since the start of March, flour has disappeared from the shops and the price of bread has increased by 70 per cent. “Supermarkets are hoarding basic goods, then selling them at higher prices,” said Hamieh.
Even before the Ukraine crisis, Lebanon was in the grip of a financial meltdown; its currency has lost more than 90 per cent of its value since 2019. With more than 70 per cent of its wheat imports coming from Ukraine, consumers have been dealt a further blow.
Hamieh, whose monthly salary has plunged from the equivalent of $1,500 to a paltry $200, now faces the additional burden of high bread prices and shortages of basic foods. “Every time I go to buy things for the family, I get depressed. We have had to cut down on so many things,” she said.
The situation in Lebanon may be more precarious than elsewhere in the Arab world because of the country’s crippling economic crisis. But across the region, grains and vegetable oil from Ukraine and Russia are crucial to national diets, and the war has stoked anxieties about food security and political stability.
Although grain prices have come down from the record highs hit immediately after the Russian attack, uncertainty surrounding exports from both countries have kept wheat prices two-thirds higher than a year ago. Sharp spikes in food prices are closely linked to social instability. A food crisis in 2007-08 caused by droughts in key wheat and rice-producing countries and a surge in energy prices led to riots in more than 40 countries around the world.
The UN International Fund for Agricultural Development said the impact of rising food prices and crop shortages was already being felt in the Middle East and north Africa. “This could cause an escalation of hunger and poverty with dire implications for global stability,” said Gilbert Houngbo, IFAD president.
With the exception of the oil-exporting Gulf states, most Arab countries have weak economies, wide budget deficits and rely on subsidised food and energy. Apart from Lebanon, Ukraine is a leading supplier of wheat to Tunisia, Libya and Syria. Egypt, the world’s largest wheat importer, relies on Russia and Ukraine for more than 80 per cent of its wheat purchased on international markets, according to UN Comtrade data.
Governments across the region have sought to contain the knock-on effect by attempting to procure more food supplies from other producers in Europe, rationing and imposing export bans on staples including flour, pasta and lentils. Lebanon has allocated all its flour supplies to bread production, and the government has also increased the price.
Grain and energy importers such as Egypt, Tunisia and Morocco will find their budgets under bigger strain as they spend more on imports and subsidies, say economists.
Kristalina Georgieva, managing director of the IMF, warned earlier this month that countries in the Middle East and north Africa that relied on energy and food imports would feel the effects of the war “quite severely”.
“I worry for Egypt,” she said about the impact of high food and energy prices on the country, when asked about the Ukraine war and the IMF’s response. “We are already engaged in discussion with Egypt on how to target vulnerable populations and vulnerable businesses,” she said.
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