The ripple effects of concurrent crises are leading the world on a path to crushing hunger — and the possibility of more war.
A brutal invasion in Eastern Europe, a chemical industry facing an unprecedented crisis and climate change threatening to slash crop yields across the globe.
There’s a perfect storm that's threatening food supplies to millions of people with a whole continent facing widespread hunger.
It didn’t start when the cold war winds returned to Europe, but Vladimir Putin’s invasion of Ukraine has made it a whole lot worse.
Agricultural exports from Ukraine and Russia account for 12 per cent of the calories traded globally. Combined, they produce about a third of the world's wheat.
"Wheat is a staple product in the diets of so many," Rabobank grains analyst Cheryl Kalish Gordon says, "20 per cent of the world's calories come from wheat and in some parts of Africa and the Middle East it's much higher."
However, the invasion itself is only one catalyst of a crisis stretching around the globe to affect crops and trade routes far from the battle fields.
If the world's food supply chain was a pool, the Ukraine war is just one stone breaking the surface. The concentric ripples are colliding with other waves from other challenges, changing their path and deepening the emergency.
And there are implications for Australia: some good, but plenty bad.
Global hunger fears grow
Just weeks before Putin invaded Ukraine in February, the global inflation pressure cooker was already about to blow.
COVID-19 had been bad enough for global supply chains, which were crippling under pressure.
The United Nations' food price index set an all-time record, surpassing the previous high reached more than a decade earlier.
Add in the war in Ukraine and the World Bank in April was forecasting that up to an extra 95 million more people would end up in poverty this year, compared to pre-pandemic levels.
That would mean that up to 676 million people were in extreme poverty globally.
As the war in Ukraine dragged into May, the United Nations Secretary-General Antonio Gueteres warned of the grave fears that he held for people ending up in famine.
"It threatens to tip tens of millions of people over the edge into food insecurity, followed by malnutrition, mass hunger and famine," he said.
Exacerbating the risks were surging fuel prices, as a world dependent on Russian gas suddenly found itself in an urgent hunt for an alternative.
Droughts throughout the North American wheatbelt meant supplies of wheat were already tight coming into this year.
Heatwaves throughout Europe and India have grain analysts forecasting further falls in production.
If extreme weather wasn't making life hard enough, access to crucial fertiliser stocks means this crisis isn't going away any time soon.
Fertiliser shortage extends the crisis
High gas prices alone would have been enough to send fertiliser prices up.
However, this perfect storm had far greater reach, and had been brewing long before Putin's troops hit Ukrainian soil.
There are three primary nutrients that make up most commercial fertilisers: nitrogen, phosphorous and potassium.
One of the most commonly used fertilisers in grain production is known as DAP — a chemical that comprises nitrogen and phosphate — and its cost hit 15-year heights this year.
Driving that price spike was extreme weather that led to plant shutdowns in New Orleans, where storms lashed one of the biggest US producers of phosphate.
Late summer storms in the North American summer also led to the temporary closure of the world’s largest nitrogen producer.
That company also owned facilities across the Atlantic, where those surging natural gas prices prompted the temporary closure of two plants in the UK.
That caused a crisis in carbon dioxide supplies, which — in turn — had major implications for the food, medical and nuclear sectors, meaning everything from soft drink supplies to humane animal slaughter were at risk.
Potash is a potassium-rich salt and also commonly used as a fertiliser. One of the world's largest producers is Belarus, a close ally of Russia.
However, access to that compound became much harder when the US and Europe imposed sanctions on a major potash producer, after the Belarusian government ordered a plane to land in Minsk so it could detain opposition activist and journalist Roman Protasevich and his girlfriend in 2021.
Further east, China was slashing production to curb emissions, while also limiting exports to retain what was produced onshore.
Those most at risk of having fertiliser cut off were those least able to do anything about it and likely to feel its harshest effects.
"When you think about some of these countries, particularly in Africa, they are purchasing fertiliser at high prices or not getting it. They aren't cash farmers, they're buying that to sustain themselves and people close to them not selling at the high price globally," Ms Kalisch Gordon says.
“So their cost of living has increased without any capacity to recoup that through higher prices on the market.”
“[If they] can’t pay, they will have lower yields.”
Farmers can grow crops without fertiliser. When supplies are low, it forces them to be more targeted in their use. However, with lower supplies, prices go up and it leaves some unable to afford it at all.
“The cost of production has increased, input costs have escalated, so it’s in a bloody mess made by human beings,” University of Western Australia agricultural professor Kadambot Siddique says.
“This could have been avoided.”
You just need to look to Sri Lanka to see the consequence of suddenly being cut off from fertiliser.
That country has just ousted its president and prime minister amid a worsening economic crisis, driven in part by a rush into organic farming that saw chemical fertilisers banned.
Six months after abandoning traditional farming practices, the country that was once self-sufficient in rice production had to import more than $600 million of foreign rice, while low crop yields virtually destroyed exports of tea and rubber.
What happens when we don't have bread
We know the power that hunger has — history is littered with deadly uprisings that result from bread wars.
Take the French Revolution and arguably one of history’s most famous quotes: “Let them eat cake.”
It’s falsely attributed to Marie Antoinette when told French peasants had no bread to eat.
Real or not, it summarised how the plight of starving people was seen by the monarchy.
Encouraged by revolutionary agitators, young women who worked in markets led a march on the Palace of Versailles, forcing Antoinette and her family to flee to Paris.
Bread shortages might not have caused the French Revolution but they festered anger at the monarchy, anger that would ultimately cost Antoinette her head.
Fewer than 100 years later, American women, lacking food and money, sparked what would become known as the Southern bread riots in the Confederacy during the American Civil War.
More recently, a lack of bread has seen mass migration throughout Africa, sparked civil unrest throughout Egypt and played a role in triggering the Arab Spring.
Those initial protests in December 2010 in Tunisia were initially dismissed as bread riots. It grew quickly as people throughout the region took to the streets demanding “bread, freedom and social justice”.
Within months, Tunisia’s long-term president would be out of office.
“Hunger and conflict are so often intertwined,” Professor Siddique says.
And migration policy experts Veronika Bilger and Nesrine Ben Brahim agree.
They argued earlier this year that the world needs to learn from history and, if not, there could again be deadly consequences far beyond the Ukrainian battlefields.
“The Russo-Ukrainian War is having ripple effects beyond Europe and could lead to crisis and displacement outside of the continent,” they wrote.
“These crises and many others should be seen as cautionary tales in understanding the impact of food insecurity on displacement, particularly for countries that are highly dependent on short-term food supplies, imports and, therefore, [are] vulnerable to food insecurity.
“There is increasing evidence showing that food insecurity is an important factor in both the aspiration and decision to migrate, not least due to its fuelling of political and social instability.”
Before there was wheat, there was milk
This isn’t the first time Putin and Ukraine have up-ended global trade — but milk was the victim last time.
Back in 2014, a passenger plane was flying high, having earlier left Amsterdam. It was headed for Kuala Lumpur but would never make it.
War was raging in eastern Ukraine, where Putin’s Russia was seeking to annex Crimea.
That plane would prove collateral damage in the war, with more than 300 people killed in the Russian downing of MH 17, 38 of them were Australians.
The global community erupted with outrage, with the West slapping trade sanctions on Russia.
Putin, in return, banned some western products from entering his country.
What few could have predicted at the time was the consequences the downing of that plane would mean for the dairy industry.
European milk that would have otherwise gone to Russia was now going elsewhere. It meant Australian dairy exporters were suddenly finding themselves facing European competition in markets they usually dominated.
It was even worse for Finnish cheesemakers, who would have normally sold their products to Russia.
Farmers were forced to offload their Russian-branded cheese alongside other locally-produced cheeses but for a fraction of the price — Finnish shoppers would later call it "Putin cheese".
The Russian import ban also meant that global stockpiles of cheese and milk powder rose.
The timing couldn't be worse. The long-planned phase out of European production caps was taking force — production had soared and prices plummeted.
With a world awash with milk and limited markets to send it to. Farmers would find themselves out of business.
Getting grain to the world
Now it's grain and oilseed at the centre of the crisis.
Russia's invasion has left some 20 million tonnes held up in Black Sea ports in southern Ukraine — a major supplier to the World Food Programme, according to Ms Kalisch Gordon.
Turkey and the United Nations last week brokered a deal, which has been months in the making, to get those exports sailing again.
However, getting grains from the Ukrainian silos to the mouths desperately seeking them — from the Middle East to the Horn of Africa — will take a hair-raising journey.
Littered on the path are mines throughout the Black Sea.
Those mines might have prevented ships from sailing out, but they've also protected Ukraine from a Russian sea attack.
Clearing the path will potentially bring in Ukraine billions in much-needed income, but it also leaves the nation exposed.
And those shipments are just one element — they're not a quick fix to the global crisis.
"Now we're starting to get to the point where their next crop comes on board and they've still got supplies in storage [so] they're not sure where they're are going to put it," Ms Kalisch Gordon says.
"Right now, there are high input costs, they haven't been able to sell all their crops from this year and last year, so they don't necessarily have cash flow.
"So you're now starting to see supplies being affected in 2023."
Where does this leave Australian farmers?
It's too simplistic to suggest Australian farmers will be winners from a major disruption in grain supply chains.
Some will undoubtedly benefit from higher prices that will be welcome relief after years of drought.
However, Australia is largely a minor player on global export markets, producing about 4 per cent of the wheat grown globally and responsible for up to 15 per cent of the trade.
Russia and Ukraine, so often dubbed the world's bread basket, account for 30 per cent of global exports.
"Next year could be quite concerning because, if the global market falls but they've already purchased their inputs [fertiliser] and if there's any risk in production, next year could be a concern," Ms Kalisch Gordon says.
"Global prices, I expect, will fall more quickly than global input prices."
Logistics and infrastructure has been destroyed and millions of Ukrainians have been displaced. That's without the ongoing challenge of climate change.
"I am not expecting a miracle, even if the war is stopped, it will take another two and a half, three years," Professor Siddique says.
Getting Ukrainian grain out to the world is just the first step. Achieving longer-term solutions will likely take longer if the world is to save millions from starvation.
"My view is that no one necessarily wants to make life easier for Russia by opening up the Black Sea and making deals with them," Ms Kalisch Gordon says.
"But such is the pressure on poor countries in this global environment that they need to work out a solution and that's why they're working so hard to find a way to open up that Black Sea trade for the supply of Ukrainian grain."
Credits
Words: Brett Worthington
Design and illustrations: Emma Machan
