Ukraine-Russia war set to cause major food disruptions: World Bank

By Ovunc Kutlu

ANKARA (AA) - The Ukraine-Russia war is to likely cause major disruptions in global food markets, the World Bank Group said in a report published Wednesday.

The two countries combined produce a quarter of the world’s wheat, according to the intergovernmental organization.

"Some low and lower-middle income countries import more than 40% of certain key staples from Ukraine and are at particularly high risk of short-term supply shortages. Food prices, already rising due to higher energy costs and trade restrictions, are likely to climb further as the conflict continues," a Trade Watch report said.

Ukraine is the world's top exporter of sunflower seeds, accounting for 38% of the global market, the fourth-biggest exporter of wheat with a 10.6% share, and the fifth-largest exporter of corn with a 7.2% share, it said.

Russia is the largest exporter of wheat in the world, it added.

"Countries that are most dependent on imports of wheat from Ukraine will face the immediate trade consequences of the conflict. Of the 23 countries that imported 10% or more of their wheat from Ukraine, in the period 2018-2020, 14 countries are low and lower-middle income economies," the report said.

Ukraine alone accounted for above 40% of total wheat imports for Gambia, Lebanon, Moldova, Djibouti, Libya, and Tunisia, it added.

Futures prices for wheat have already surged by over 60% since the beginning of the Ukraine-Russia war, it noted.

"Moreover, disruptions to exports of wheat will affect markets for corn and rice, which are wheat substitutes, benefitting net exporters and harming net importers of those products," it added.

Trade disruptions caused by the war in Ukraine will have their most immediate and direct effects on food markets, indirect impact through rising energy prices, sanctions, and countersanctions, and an effect on investment, hurting global trade and economic activity more broadly, according to the report.