Ukraine war: WTO boss warns of global food crisis

By Tom Espiner
Business reporter, BBC NewsPublished11 hours agoShare

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Volunteers prepare meals for Internal displaced people, fleeing the recent clashes between M23 rebels and Congolese soldiers, at a camp in Kanyarushinya north of Goma

A food crisis kicked off by the Ukraine war could last for years without intervention, the head of the World Trade Organization has said.

African countries could be hit especially hard by wheat and fertilizer shortages, WTO director general Ngozi Okonjo-Iweala told the BBC.

Millions of tonnes of grain are sitting in warehouses and Ukrainian ports unable to be exported due to the war.

She said that was “really sad” to see as grain prices soar.

Ukraine is a major global exporter of wheat, contributing to 9% of the global market. It also accounts for a massive 42% chunk of the global sunflower oil market, and 16% of the world’s maize.

Because of gridlock due to a Russian blockade of Black Sea ports, and Russian and Ukrainian mines along the coast, between 20 and 25 million tonnes of wheat are stuck in Ukraine while global grain prices spiral upwards.

Ms Okonjo-Iweala said wheat prices had risen 59% compared with last year, sunflower oil was up 30%, while maize was 23% higher.

The United Nations is leading efforts to try to establish a “grain corridor” with a Turkish naval escort for tankers leaving Odessa and other Ukrainian ports.

But Russian Foreign Minister Sergei Lavrov has said Ukraine needs to clear mines from its Black Sea ports.

“We state daily that we’re ready to guarantee the safety of vessels leaving Ukrainian ports and heading for [Turkish waters], we’re ready to do that in cooperation with our Turkish colleagues,” he said on Wednesday.

Meanwhile Ukraine has said it needs “effective security guarantees” before it can start shipments, voicing concerns that Moscow could use the potential corridor to attack Odessa from the sea.

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Analysis box by Dharshini David, global trade correspondent

Ukraine typically produces enough to feed 400 million mouths, but Russia stands accused of turning that breadbasket into a stealth missile, with blockaded ports reducing the stream of exports to a trickle.

It is some countries in the Middle East and Africa in particular that will feel the threat of shortages.

Libya and Eritrea get more than 40% of their wheat from Ukraine, and Lebanon more than 60%.

But the pain is global; wheat prices are up a third by since Russia invaded.

There is no quick fix. Even with an agreement for a corridor and the ability to secure sufficient ships, mines will have to be removed from the area to ensure safe passage, which is a lengthy painstaking process.

And already there are warnings that tens of millions of people are at risk of famine, and social unrest erupting in parts of the globe.

It’s just a taste of what could be at stake if an agreement fails to materialise, with today’s hunger pangs and stretched budgets threatening to spill over into a prolonged devastating economic and social crisis.

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Ngozi Okonjo-Iweala
Image caption,Ngozi Okonjo-Iweala says if an agreement on Ukraine foodstuffs can’t be reached, there will be a “dire situation worldwide”

‘Fingers crossed’

Only two million tonnes of grain have been exported from Ukraine via train and in trucks, and Ms Okonjo-Iweala said it was “critically important to see if we can get an answer” to the problem.

UN secretary general Antonio Guterres has formed a task force looking at these issues, she said.

“He’s spent a lot of time trying to work with Russia to see if an arrangement can be made, so, we’ll keep our fingers crossed,” she said.

If an agreement can’t be made, “this is really going to be a dire situation worldwide”, Ms Okonjo-Iweala said.

She said 35 countries in Africa import food from that Black Sea region, while 22 import fertilizer.

“You can imagine what a big impact this is going to have, even just on the African continent,” she said. “I hope that we don’t go into a really severe food crisis for the next couple of years.”

She said grain can’t be exported from the region at the moment, and there is a harvest coming up in July, “with a similar quantity that will go to waste, so you can see that this will work its way through for the next year or two, and that will be really disastrous for certain parts of the world”.

She added that supply chain bottlenecks caused by the Covid pandemic and labour shortages exacerbate the issue.

In addition, she called on leaders to relax export restrictions on foodstuffs, which can worsen food price spikes.

source https://www.bbc.com/news/business-61727651

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