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<Book Review> Food crisis, the future has already begun 1

 

Author Ruan Wei

Director and Researcher, Japan Agriculture, Forestry and Heavy Industries Research Institute. He was born in Hunan Province, China, and graduated from the Department of Japanese Language at Shanghai Foreign Studies University. Afterwards, he came to Japan and completed a master's degree in economics from Jochi University Graduate School, and was a visiting researcher at the Agricultural Center at Louisiana State University in the U.S., a member of the overseas expansion committee at Jetro and Nippon Foods, a member of the research conference at the Asian Economic Research Institute, and a finance officer dealing with customs policy and customs administration. He served as a member of the Seong Committee.

 

1. The breadbasket of an invaded world - the seeds of tragedy were sown across the world

Wheat is the most common grain responsible for humankind's diet. It is the most widely consumed in the world, and is processed into various unique dishes in each country, such as bread, noodles, cakes, cookies, and crepes. Meanwhile, rice is the staple food in most countries and regions in Asia, including Korea, Japan, southern China, and Southeast Asia, and as dietary habits become westernized, wheat consumption has begun to increase. Among grains, rice is produced and consumed within the country and is distributed domestically, while wheat is the grain with the highest volume of trade globally.

 

However, Russia's military invasion of Ukraine in 2022 clearly demonstrated that the supply of wheat, which is essential for humanity, is surprisingly vulnerable. Many people did not even know that Ukraine and Russia were large exporters of wheat, but as soon as the war cut off wheat supplies from both countries, the wheat market on the Chicago Board of Trade (CBOT) rose to an all-time high, throwing the global food market into chaos. No one would have expected it to be this much. As of 2020, wheat exported from Ukraine and Russia to the world accounts for 27.9% (55.32 million tons) of the total, which is calculated as an annual consumption of 100 kilograms per person (equivalent to about half of the calories required by an adult male) the two countries are responsible for providing food for 553.2 million people.

 

2. Developing countries dependent on food imports

As of 2020, Russia's wheat export destinations are Egypt in first place with 8.25 million tons, Turkye in second place with 7.9 million tons, followed by Bangladesh, Azerbaijan, Sudan, Pakistan, Nigeria, and Yemen. In other words, developed countries are not at all dependent on Russian wheat. Ukraine's top five wheat export destinations are Egypt, Indonesia, Bangladesh, Pakistan, and Turkye, followed by Tunisia, Morocco, Yemen, Lebanon, and the Philippines. According to statistics from the Food and Agriculture Organization of the United Nations in 2020, Egypt's dependence on wheat imported from Russia and Ukraine exceeds 70%, and Lebanon reaches 60%. It is calculated that Tunisia depends on Russia and Ukraine for 80% of all grains, including not only wheat but also corn. Approximately 50 developing countries depend on these two countries for more than 30% of the wheat they import. The disruption in grain supply caused by Russia's invasion of Ukraine has hit developing countries in the Middle East, Africa, and Asia hard, pushing them into a food crisis.

 

3. The most dangerous famine risk since World War II

As grain prices soared within weeks of Russia's invasion of Ukraine and the amount of food that could be imported decreased, prices also soared within their own countries, leading to an increase in the number of low-income people around the world who were unable to buy food. Ordinary people, who had been doing well until a few weeks ago, were unable to buy food and were driven into a state of nutritional deficiency and acute starvation. Due to the spread of COVID-19 in 2021, human movement was restricted and logistics chains were stagnated, causing oil and grain prices to rise one level higher than before. As a result, 276 million people in 81 countries supported by the UN World Food Program are acutely ill in early 2022. faced with starvation. This is an all-time high and an increase of 126 million compared to before COVID-19.

 

Including these acutely hungry people, the number of people affected by hunger in 2021 is 828 million, equivalent to 9.8% of the world's total population. This is a sharp increase of 46 million from the previous year, 2020, and an increase of 150 million compared to 2019. For reference, David Beasley, Secretary-General of the UN World Food Program, said at the UN Security Council on March 29, 2022, “If the conflict in Ukraine is not resolved, 47 million new cases of acute hunger will occur in 81 countries, the most dangerous crisis since World War II.” “The risk of starvation is approaching,” he warned. In fact, the UN World Food Program's aid costs are increasing by $71 million every month due to the rapid increase in food, fuel, and transportation costs, and as a result, it is estimated that the number of people the UN World Food Program can support will decrease by 4 million. In other words, not only the decline in physical supply, but also the surge in prices are tightening the scale of international emergency support in terms of budget, leaving the famine that can be alleviated unattended.

 

4. The real crisis begins now

The number of acutely hungry people announced by the Food and Agriculture Organization of the United Nations was at an all-time high, but the biggest reason why riots and starvation were avoided was probably due to the time lag effect. Agriculture has important periods of sowing and harvesting, and at the time when the whole world was embarrassed by not being able to import wheat and corn from Ukraine, Ukraine's wheat harvested in 2021, the year before the outbreak of the war, had almost been exported. About 90% of the wheat in Ukraine's 2021/22 crop year (2021/7 - 2022/6) is winter-grown wheat, which was sown around September-October 2020, overwintered, and harvested in July-August 2021. Most of the harvested wheat was exported between August and December of the same year, and this process is a typical timetable that is repeated every year. Russia's export wheat is mainly produced in the European Russian region west of the Ural Mountains (western Russia and within the European continent). Most of this region is also winter wheat, so sowing and harvesting times are similar to those in Ukraine. In other words, at the end of February, when Russia invaded Ukraine, most of the wheat exported by the two countries for 2021/22 had already been exported, so the invasion was less affected.

 

Of course, that doesn't mean there was no impact at all. The first thing affected by Russia's invasion of Ukraine will be Ukraine's corn exports in 2021/22. Ukraine's corn is sown in April-May, harvested in September-November of the same year, and mostly exported from October to May of the following year, but this was halted due to the war. Sunflower oil is also affected as the harvest and export times are similar. As of June 2022, due to the blockade of ports in southern Ukraine, 22-25 million tons of grain cannot be exported and is piled up in warehouses. In July and August, wheat, barley, and rapeseed for 2022/23 will be harvested, and from September onwards, the harvest season for wheat, barley, and rapeseed will begin in September. If corn and soybeans reach the harvest season and stock grains cannot be exported quickly, there is a high risk that a significant portion of the newly harvested grains will be stored in the field and discarded over time. Although exports partially resumed in early August, the situation continues to be unpredictable.