For months the world has been fretting about rising energy prices, which were given a further jolt from the war in Ukraine. Now it’s waking up to the potential for a full-blown food crisis.
In the Swiss Alps this week, at the first in-person World Economic Forum in two years, the chatter in the hallways, at dinners and on shuttle buses was frequently about one thing: the worry that shortages of agricultural commodities and spiking prices could reverberate well beyond the traditional buyers of Ukraine’s grains.
Russia has been blocking Ukrainian ports in a war now in its fourth month. That has halted grain shipments and drawn accusations that Moscow is weaponizing food. Mines laid around the ports add a complication, alongside the damage from Russian rockets.
Then there’s the worry that Russia could yet target grain freighters. While Moscow says it plans to reopen ports to international shipping, it has a history of broken promises in the war on safe corridors, be they for people or goods.
Overland routes by rail to Baltic harbors are also problematic and not an immediate replacement for exports by sea.
Ukraine is the breadbasket for many places, but in particular poorer countries that can’t easily secure supply elsewhere or keep a lid on prices through endless subsidies. That’s a recipe for social trouble far beyond Ukraine’s shores. Even if there isn’t street unrest, crime (stealing food), hoarding and poverty are likely.
So what’s the solution? There was some discussion in Davos around how to support developing nations get their hands on alternative supplies. But as India’s recent move to temporarily suspend wheat exports shows, protectionism is already in the wind.
The feeling is one of crisis potentially piling on crisis, showing the effect of Russia’s war goes well beyond the destruction in Ukraine. And the damage could last for many months yet. — Rosalind Mathieson