implications of Ukraine crisis for global markets

Reply on DGroups | 7 comments

March 21, 2022, 2:32 p.m.

Samia Qumri

Hi Everyone
Was going through Twitter and found this thread interesting! I thought I’d share with the group

How serious is the spike in global food prices caused by Russia’s invasion of Ukraine, and what can be done? https://twitter.com/econmitch/status/1505890087313321984?s=21

Samia

March 21, 2022, 1:25 p.m.

Simon Levine

Hi all,

Things might get very serious, but we can’t assume that it will be as bad as some are painting it out to be. Production and trade from Ukraine will almost inevitably be hit – but how badly? We don’t know. It appears that it would be wrong to assume that the production season will be completely missed in the country as a whole this year https://www.fwi.co.uk/news/defiant-ukraine-farmers-start-spring-field-work-with-tractor-convoy though obviously export restrictions and disruptions to the ports will be serious. The big message should be to keep watching and being prepared. Since we were not capable of responding sufficiently to the food crises we were already faced with (Yemen, S Sudan, Somalia, Ethiopia, Nigeria …), in many ways nothing has changed for emergency relief. We do as much and as well as we can, knowing it isn’t enough.

The WFP paper is all about how WFP’s food aid in-kind will be hit. But if we all forget about food aid in-kind and think cash (as of course this community instinctively does, I know), then things look different. Cash gives people the ability to switch to foods whose prices may not rise so much, if at all (eg root crops and tubers). How much prices of locally produced food will rise is very context specific, depending on the crop and the markets (eg for cassava in landlocked countries – probably hardly at all.). So, no generic solutions here, just lots of thinking needed by people who really know about food markets in the places where they are working.

As for investments in production to compensate – well, in one sense, very much so. But… isn’t that supposed to be happening all the time? Most states have agric research and extension programmes (usually badly underfunded) and dev’t agencies of all kinds have been busy on this for decades. Someone should certainly be giving them all a big kick up the backside and making sure that they are aware of changes in the probable economic environment for the coming year (eg potentially higher prices for food imports, potentially higher transportation costs - so market opportunities for others). But trying to get involved in new initiatives now to boost this year’s production? If you’re not already involved in agricultural dev’t/production, I’d be cautious about thinking that rushing into something now can make the difference.

S

March 21, 2022, 12:13 p.m.

[Hidden email]

Thanks for posting these resources Emily -- as you say, it is sobering (but
not surprising) reading...

I know this group is one of the places that bridges the
humanitarian-development gap... I wonder if any one here is aware of
efforts to bump up production in alternative locations?

For example, I know Northern Uganda has some strong supply chains around
sesame and cotton... is part of the answer to work with farmers and
processors in areas like this to bump up production of other edible oils?
Is anyone on this group looking into this kind of pivot/investment? It's
clear that we will miss the planting season in Ukraine, so where can we
invest to try to prevent a worldwide food crisis?

Would love to hear your thoughts...
Karri

March 21, 2022, 6:52 a.m.

[Hidden email]

Thank you for sharing It is very helpfull.

March 21, 2022, 6:46 a.m.

Corrie Sissons

Thanks for re-posting this Emily.

I think many of us will have been grappling with the major role Russia and Ukraine play in global food and energy markets and wondering what the impact will be in other regions and countries.

@MiC community - are any of you working in contexts where you are seeing or responding to impacts of the Ukraine crisis in your markets? Either current or predicted?

Countries such as Bangladesh and Yemen (amongst many others) already rely heavily on wheat from Ukraine for their food security (A Russia-Ukraine War Could Send Ripples Across Africa and Asia (foreignpolicy.com) <https: 01="" 2022="" 22="" foreignpolicy.com="" russia-ukraine-war-grain-exports-africa-asia="">) and may further be hit by anticipated cuts to WFP food rations and supply chain challenges. Some countries like Egypt seem to have already put protectionist measures in place to restrict exports on food commodities (: 5 reasons war in Ukraine is a gut punch to the global food system - POLITICO <https: article="" war-in-ukraine-global-food-system-wheat-trade-export="" www.politico.eu=""> ) but the region exports a lot of fertilizer too which may have longer lasting effects on agriculture too I fear.

We are a huge network of practitioners here and so I think it would be beneficial to share what we are seeing/hearing at this time and share useful resources. I know the WFP has started releasing some regional analyses for example : Food Security Implications of the Ukraine Conflict for the Southern Africa Region - Angola | ReliefWeb <https: angola="" food-security-implications-ukraine-conflict-southern-africa-region="" reliefweb.int="" report="">

If there is interest - the MiC Advisory Committee <https: mic-advisory-committee="" seepnetwork.org=""> could always rally a webinar to discuss this amongst interested people as well.........

Over to you all!

Best,

Corrie

Corrie Sissons
Technical Advisor - Cash and Markets | Humanitarian Response Department | Catholic Relief Services (CRS)
Email: [Hidden email] <mailto:[Hidden email]> | Skype: corriesissons
Mobile (UK): + 44 7729629852

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March 21, 2022, 6:46 a.m.

Ayman Ramsis

Thank you Emily, these are very helpful documents.

Many thanks,

Ayman
Samaritan's Purse Iraq

March 20, 2022, 5:38 p.m.

Emily Sloane

Sharing a couple of depressing but very important reads from FAO & WFP about the likely implications of the Ukraine crisis for global markets and global food insecurity (noting that these were shared last week through the Global Food Security Cluster but worth sharing here for those who missed them):

1. The importance of Ukraine and the Russian Federation for global agricultural markets and the risks associated with the current conflict (FAO) <https: 3="" __https:="" cb9013en="" cb9013en.pdf__;!!idemusa!xn0qp6wvtljvqs0rdc0ta4ljhawcripduvzzqa9dkdijqg9tdmypokzzsdt9-bklrqo$="" urldefense.com="" v3="" www.fao.org="">
2. Food security implications of the Ukraine conflict (WFP) <https: __https:="" default="" documents="" files="" fscluster.org="" sites="" urldefense.com="" v3="" wfp-0000137463-2.pdf__;!!idemusa!xn0qp6wvtljvqs0rdc0ta4ljhawcripduvzzqa9dkdijqg9tdmypokzzsdt9ilx9a2m$="">

Emily Sloane | Cash and Markets Technical Advisor
International Rescue Committee
122 E 42nd Street, New York, NY 10168-1289 | Rescue.org
Skype eslonimsky
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