Representatives of the collective West members are tripping over each other as they scramble to accuse Russia of undermining global food security. The G7 has issued a special statement in this regard. To be sure, we responded.
Those most deeply concerned reinforced the choir by their solo performances.
That is, Russia is now to blame for famine in Africa. No one ever went hungry there before, as everyone knows.
It is easy to debunk this fake manufactured by Washington and its allies with numbers and facts.
Let’s look at the situation from the perspective of economic experts.
Even before the special operation in Ukraine, international agricultural production was among the worst affected areas due to global economic instability. The current food market situation has been taking shape over at least the past two years. The commodity exchanges show that wheat prices grew by 25 percent in 2021 alone. By February, they were significantly above average prices in 2017-2021 (up to 62 percent). The price of corn has increased by 162 percent and rapeseed by 175 percent within a span of two years. Moreover, prices have retraced from their peak values. These are standard market price fluctuations, which are not unusual for the global grain markets in recent history.
Why have grain prices been rising over the past two years? There are several reasons behind that.
First, it was the COVID-19 pandemic which disrupted supply chains and increased freight and insurance costs. In 2020-2021, the developed economies sharply increased their financial injections into their respective economies in order to overcome the aftermath of the pandemic. The aggregate value of anti-crisis measures in the United States, the EU and Japan amounted to over $8 trillion, which drove the demand up and whipped up inflation (including food prices). The trend was further exacerbated by open trade wars between the key players and persistent sharp contradictions in the agricultural market regulations, which led to food stocks dropping to their lowest over the past 5 to10 years, sending grain prices higher. Moreover, freight rates have almost doubled.
Second, some Western countries hastened their transition to green energy in hopes of developing alternative energy sources at the expense of traditional fuels, which led to increased energy prices. In particular, oil prices in 2020-2022 grew by over 22 percent in the face of a drop in demand during austere pandemic-related restrictions. Natural gas prices have risen significantly as well. As a result, prices for mineral fertiliser went through the roof in December 2021. Prices for carbamide and saltpetre increased 3.5-4 times, and prices for other types of fertilisers surged 2.5-3 times. What do we need mineral fertiliser for? That’s right, agriculture. The higher the price of fertilisers, the higher the price of a bushel of grain. As a reminder, all of that happened before February 24.
Amid rising fuel and fertiliser prices, farmers began to reduce the planted acreage across the board, which made agricultural produce increasingly scarce against the backdrop of ever-growing demand. A drop in supply amid growing demand means higher prices.
Fourth, the sanctions, which are of primary importance. The unilateral economic pressure measures imposed by the collective West on our country in February-March 2022 exacerbated the negative trends on the global food and energy markets and in the manufacturing industry. Payment restrictions and supply chain disruptions affected all economic operators, including agricultural companies, which ran into financial and transport difficulties when servicing food contracts. In the face of uncertainty, agricultural producers started questioning their choices concerning investment in expanding or even maintaining their operations. Some have decided to change how they do business, which further reduced supply on the market.
Unilateral sanctions, including threats of wide-sweeping arrests of dry cargo ships and disconnecting Russian financial institutions from SWIFT, have significantly exacerbated the problem of disrupted supply and financial chains involving Russian economic operators. Given Russia’s role in agricultural trade, this could not but affect the food supplies to our partners. Despite being fully aware of Russia’s role on the global agricultural market and of the challenging global food security situation, the West has nonetheless imposed sanctions affecting the agricultural sector and worsened the already distressing situation.
Washington, London and Brussels were not concerned about the fact that this could lead to malnutrition, even starvation, in certain parts of the world.
That said, even despite the difficulties manufactured by the West and in full accordance with the previously reached contractual agreements, the Russian Federation will continue to fulfil in good faith its obligations concerning the export of agricultural produce, fertilisers, energy and other critical products.
For many years now, we have been accused of creating threats to energy security and hearing claims that Russia is weaponising its gas supplies and can cut them off if it deems that something went wrong for it.
The “if something” situation is here, but Russia continues its gas supplies. Those who intimidated the world with tales of the Russian energy switch, namely, Washington, are forcing everyone to say no to Russian gas.
So, who has created the threat to energy security? Ditto for the food.
The writer of this article is a spokeswoman of the Russian Ministry of Foreign Affairs.