Written by Sytske Post
It has been two years since the COVID-19 pandemic triggered supply chain turmoil around the world. Restricted access to markets and labor posed significant challenges for the global economy. Currently, the Russian invasion of Ukraine has yet again put the world's supply chains to the test. Agricultural commodities are among the chains feeling the most ripple effect of the war as Russia and Ukraine are two of the biggest wheat suppliers, producing about a quarter of the world's exports. The current conflict has, therefore, heavily disrupted the global wheat market. The effects of this disruption will most severely be felt by countries in the Middle East and North Africa, who are highly dependent on wheat supplies from both Russia and Ukraine. These new developments are a cause for security concern, as certain countries in this region are already in dire economic, political, and social conditions. Increases in food prices and food shortages are thus likely to exacerbate humanitarian conditions in the region.
Disruptions in agricultural supply chains
Food insecurity is a growing challenge for countries in the Middle East and North Africa (MENA). Conflicts and protracted crises are amongst the main drivers behind the increased food insecurity. Today, the situation is additionally exacerbated by disruptions in supply chains. The MENA region, in particular, is the world's largest cereal importer. As a result of this dependency, the region is extremely vulnerable to supply chain disruptions. This import dependency is often linked to environmental constraints and growing populations, and the growth of urban areas. But also influxes of migration movements, both internal and across countries, resulting from instability and conflict put strains on local food systems.
However, weather instability and climate change, which are linked to rising temperatures and more severe and frequent extreme weather events, as well as changing agro-ecological conditions, are thought to be the most detrimental to agricultural production in the region. The most prominent effect of climate change in the MENA region is water scarcity, with experts routinely describing the region as "the world's most water-stressed." Lower rainfall and higher temperatures are expected to shorten growing periods, diminish crop yields and productivity, and negatively affect animal output through changes in the length of the grazing season and less drinking water. Climate change-induced warmer and drier climates are, therefore, expected to have a significant impact on agricultural patterns and, by extension, food security.
These unfavorable conditions are among the reasons this region is dependent on food imports. However, also major producers of wheat supplies are affected by these weather conditions. Worldwide stockpiles plummeted in the fourth quarter of 2021, as a result of crop damage caused by droughts, frost, and heavy rain in the United States, Canada, Russia, Ukraine, and the remainder of the Black Sea region. A report by the World Food Programme stated that "2021 was the third-costliest year on record for climate-related disasters. More frequent droughts, floods, and storms were reported across the globe leading to widespread food insecurity".
These external disruptions are one of the factors driving the rise in wheat prices, which had already increased by 49% above their 2017-2021 average. The COVID-19 outbreak was also linked to initial increases in prices. Multiple national lockdowns resulted in the delay and disruption of global supply chains, as the pandemic restricted access to transportation, markets, and labor. Other factors included decreased food demand, as well as panic buying at the start of the pandemic. The MENA region was heavily impacted by these disruptions, due to the region's high dependency on food imports. Climate change and COVID-19 related disruptions had already placed the MENA region in a vulnerable state. Today, they are faced with yet another additional challenge: the war in Ukraine.
Wheat shortages’ impact on the MENA region
The war in Ukraine is currently the biggest threat to the global wheat supply. Russia is the top global exporter of wheat and Ukraine is amongst the top five in the world. The war has halted its production, and the impact on wheat prices is already significant. Since the invasion of Ukraine, wheat prices rose by another 62%. The total of their production accounts for about a quarter of the world's exported wheat. The disruption and delay in their agricultural exports exacerbate food insecurity in regions highly dependent on their supplies. These disruptions in the supply chain will most acutely be felt in the MENA region, where countries strongly rely on Ukrainian and Russian wheat supplies.
Military action in the Black Sea has caused a standstill in export transportation from both Ukraine and Russia to the MENA region. Ukraine also announced, on March 9, 2022, that it will stop grain and other food exports to avoid a domestic humanitarian crisis. In addition to these disruptions, other challenges are still prevalent. Farmers are fleeing the violence, and the conflict is damaging infrastructure and equipment. Therefore, the disruptions are likely to endure. The fighting can also have a negative impact on the upcoming harvest, especially if it persists until April, when the planting season begins. Russia has some of its wheat and other commodities moving by land, however, the complexity of navigating sanctions and financial measures has still hindered its trade. For example, in reaction to these economic sanctions, Russia's trade and industry Minister suggested a halt in fertilizer exports on March 4.
The supply of wheat in the MENA region was already in dire condition due to the effects of climate change (e.g. water scarcity, droughts) and fragile political and economic conditions (e.g regional conflict, COVID-19). The war in Ukraine adds fuel to the already existing food insecurity in the region. The last time the price was this high was during a global food crisis in 2008, which prompted political upheaval around the world. Therefore, these circumstances can enhance the possibility of social unrest erupting in a region already facing numerous grievances.
One of the countries most affected by the disrupted wheat supply chain is Egypt, which imports over 80% of its wheat from Russia and Ukraine. The current conflict, therefore, has thrown Egypt's administration into disarray, as concerns grow about whether the national food rationing system can be maintained. More than 88% of the population is registered with this system. To maintain a constant supply of bread for them the government has to gather roughly 10 million tonnes of wheat. The government already issued a three-month embargo on the export of wheat, flour, and other staples on March 10. There are currently 4 million tonnes of wheat reserves, but the government will need to come up with another 6 million tonnes to ensure that the food rationing system continues. To do so, the government intends to purchase the remaining wheat from local farmers, setting incentives and regulations in place. Furthermore, the government intends to provide fertilizer subsidies to encourage domestic wheat producers to sell their crops to the state. These strategic measures, as claimed by the government, will generate enough reserves to supply the population until the end of 2022.
However, even if the regime is able to generate the needed wheat supplies for its population, the capacity needed to store these amounts is limited and can cause a massive loss of crop. Additionally, water scarcity and unfavorable weather conditions still pose a challenge to self-sufficiency. Water scarcity concerns have recently been exacerbated by the operation of the Grand Ethiopia Renaissance Dam. These effects are already being felt, with drastic spikes in the price of unsubsidized bread, which jumped by as much as 25%. This forces the government to set fixed prices for unsubsidized bread.
The Egyptian government has also had a discussion on raising the prices for subsidized bread. These adjustments could have a huge impact on the economic and social stability of the country, as the subsidized bread programme is at the core of Egypt's social protection system. This topic has been highly sensitive since the 1977 bread riots, caused by the announcement of former president Anwar Sada to lift subsidies on flour, rice, and cooking oil. Successive regimes have been wary of increasing the price of bread for the fear of creating social unrest. Food insecurity in combination with other contributing factors also triggered protests in 2008, 2011, and 2017.
Lebanon is likewise concerned about the humanitarian effects of rising food prices in the country. Ukraine and Russia account for up to 75% of Lebanon's wheat imports. Local and regional socio-economic and political dynamics resulted in the collapse of the financial and banking sectors in the country. The current war in Ukraine is likely to exacerbate Lebanon's economic issues, which have already pushed roughly three-quarters of the people into poverty.
Certain measures have been taken to regulate these shortages. On March 5, Lebanon's industry minister tweeted that the country will begin limiting wheat, allowing it to be used just for bread production until alternative supplies could be secured. Also, on March 14, the government began transferring funds to 150,000 extremely poor households as part of the Emergency Social Safety Net. However, the government currently possesses only one month's worth of wheat reserves, and there is, therefore, a dire need to secure alternatives through other suppliers.
Tunisia relies on Ukraine and Russia for about 45% of its wheat supply, and the recent developments in Ukraine have sent wheat prices to a 14-year high. The country's economy is already in a fragile state, battered by inflation and rising unemployment, as well as a considerable amount of public debt. These increased prices can exacerbate the humanitarian conditions in the country. The government has remained rather silent on the shortages, albeit the evidence is apparent. Reports indicate that the Tunisian government has already been unable to pay for inbound wheat shipments, and that grain items such as pasta and couscous, which make up a large part of the Tunisian diet, have been in limited supply. Recent protests against President Kais Saied, who is accused of monopolizing power, have placed the country in a deepening political turmoil. The increase in wheat prices and shortages are likely to add fuel to the brewing storm.
The security threats of food uncertainty in the MENA region
With the ongoing war in Ukraine affecting wheat supplies, the delays, shortages, and insecure prospects of summer harvests, countries in the MENA region are on high alert. These countries are extremely dependent on the wheat supplies coming from both Ukraine and Russia, and the recent spikes in prices as well as supply shortages are likely to exacerbate already existing humanitarian conditions and famine in the region. Governments have already taken certain measures to minimize the impact. However, water scarcity, unfavorable climate conditions, shortage in storage, and political turmoil are providing great challenges for these countries to secure the needed wheat supply for their populations.
Furthermore, the food shortage and price increase can potentially cause social unrest in the region. Whereas food insecurity does not directly lead to social unrest, when combined with other grievances, sudden spikes in food prices can be used to mobilize and bring people together for effective political movements. In the past, rising bread prices have been catalysts for political change in the MENA region, such as the 1977 Egyptian bread riots, but also similar movements in 2008 and 2011. Social uprisings are complex phenomena and can't be linked to one specific factor or circumstance. However, with current political dissent (e.g. anti-Saied protests in Tunisia), high unemployment, and inflation already prevalent in the region, the inaccessibility of food can aid in the mobilization of people and promote social instability.
About the author: Sytske Post Sytske is a graduate of International Studies and is currently enrolled in the Master's degree in Conflict Studies and Human Rights at Utrecht University. This educational background has provided her with an interdisciplinary understanding of violent conflict and security. Currently, she is particularly interested in the intersection of technology and conflict, ranging from digital disinformation to the shifting nature of warfare powered by artificial intelligence.
The article was written with help from Jacob Dickinson and edited by Ruben Pfeijffer and Alessia Cappelletti.