Thursday, 26 May, 2022

Africa faces grain shortage, sharp rise in food prices if Ukraine exports stop

Africa is facing possible shortages of grain and a sharp rise in food prices if exports from Ukraine to the continent cease amid Russia’s invasion of the country.

If cereal exports from Ukraine stop, that would also be felt in European markets such as Germany, albeit to a lesser extent, Germany’s Kiel Institute for the World Economy research institute said in a report on Friday, report agencies.

Ukraine “is one of the most important grain exporters in the world, and especially relevant for Africa,” said Hendrik Mahlkow, a trade researcher at Kiel Institute.

“Losing Ukraine as a supplier will noticeably worsen the supply situation across the continent.”

Ukraine and Russia together account for about 29 per cent of the world's wheat, and nearly a fifth of the corn trade, in addition to also being important sources of other commodities and metals. The conflict has led to a surge in commodity and metal prices, adding to inflationary pressures on the global economy.

The International Monetary Fund has warned the conflict and subsequent sanctions imposed on Moscow, will have a “severe impact” on the global economy.

The Black Sea plays a major role in the global food trade, exporting at least 12 per cent of the food calories traded in the world, according to the UN agency International Fund for Agricultural Development (IFAD).

Tunisia’s imports of wheat and other cereals would permanently decrease by more than 15 per cent and 25 per cent respectively, if Ukraine stops its exports due to the current conflict, Kiel's report said.

Egypt, the Arab world’s most populous country, would also be affected. Its wheat imports are expected to slump 17 per cent and other cereals fall 19 per cent.

South Africa, along with Cameroon, Algeria, Libya, Ethiopia, Kenya, Uganda, Morocco and Mozambique would also see their wheat and cereal imports slide if Ukraine exports cease.

“Ukraine is irreplaceable as a grain supplier, even in the long term. Its failure worsens Africa's supply and also drives up prices,” Mr Mahlkow said.

“One way of increasing the world market supply of cereals quickly would be to reduce growing biofuel and to use the land for cereal grains.”