The Daily - How the War in Ukraine is Creating a Global Food Crisis

Episode Date: April 5, 2022

Ukraine and Russia are enormous producers of wheat, corn, barley, sunflower oil and fertilizer. One study calculated that the two countries accounted for 12 percent of the world’s calories.With Ukraine under attack and Russia hit with strict sanctions, a huge supply of food is suddenly trapped — with Africa and the Middle East particularly imperiled.Guest: Jack Nicas, the Brazil bureau chief for The New York Times.Want more from The Daily? For one big idea on the news each week from our team, subscribe to our newsletter. Background reading: An increase in world hunger could be one of the repercussions of the war in Ukraine.For more information on today’s episode, visit nytimes.com/thedaily. Transcripts of each episode will be made available by the next workday. 

From New York Times, I'm Michael Barbaro. This is The Daily. Today, how Russia's invasion of Ukraine is creating a food crisis across the world. My colleague, Jack Nickus, reports from Brazil. My colleague, Jack Nickus, reports from Brazil. Plus, the latest on alleged Russian atrocities in the town of Bucha. It's Tuesday, April 5th. Jack, you are the bureau chief in Brazil. So how is it that you became involved in reporting on the fallout from the war in Ukraine?

Well, when the war started, almost immediately, it became a story here in Brazil. And that's because Brazil is a major producer of the world's food, and it's a major importer of Russian fertilizer. And so when sanctions hit Russia, it became an issue for Brazilian farmers getting Russian fertilizer. And very quickly, the Soybean Farmers Association here in Brazil told its farmers to start limiting the use of fertilizer because there was an expected shortage because of the war. I then realized that there was a much, much larger story here. It's not just Brazil. It's not just Russian fertilizer. But Russia and Ukraine are central

to the world's food supply. And this sort of disruption was not playing out just in Brazil, but it was playing out in countries across the planet. And the war had really disrupted how the world feeds itself. Jack, just how central are Russia and Ukraine to the world's food supply? Explain that. Ukraine and Russia are together enormous producers of wheat, corn, barley, which is a major animal feed, sunflower oil, which is a really important cooking oil in many parts of the world,

and also fertilizer. And, you know, just to give you a sense, together they account for nearly 30% of the world's wheat exports. And that wheat helps feed billions of people in the form of bread and flour and pasta and packaged goods. One study calculated that Russia and Ukraine together account for 12% of the world's calories. What you're describing makes it seem like these two countries are kind of the breadbasket of this entire part of the world. Completely.

And so after Russia invaded Ukraine, as we know, the Western world and much of the world hit Russia with very strict sanctions. And that essentially cut Russia off from much of the world. At the same time, Ukraine is under attack. You know, the wheat fields in Ukraine, some of them have turned into battlefields. The farm workers who usually would sow and harvest the fields are suddenly fleeing the country or on the front lines. Fuel that is used to power the tractors is being diverted to the military. And the Black Sea, the way they export wheat and corn and barley

is essentially cut off. And so what that means is this huge supply of food is suddenly trapped. So which countries are being most impacted by what you just described, by all of this food being locked in Russia and Ukraine? Well, we can say that just about everyone in the world is affected. But there are dozens of countries, especially in the Middle East and Africa, that are most at risk here.

And that's in part because that region is geographically close to Ukraine and Russia. So they import a lot of wheat from those countries. And wheat is important culturally. It's a staple food in the region. So in March, after the war began, the UN's Food and Agriculture Organization put out a staple food in the region. So in March, after the war began, the UN's Food and Agriculture Organization put out a major assessment of the situation and the impact on the global food

system from the war. And specifically, it showed that some smaller countries depend almost entirely on Ukraine and Russia for their wheat. So Eritrea, Armenia, Mongolia, Azerbaijan, these countries import virtually all of their wheat from Ukraine and Russia. Wow. And so that's alarming for those countries. But some of the world's largest wheat importers also are highly dependent upon Ukraine and Russia. So Egypt, the world's single biggest wheat importer, gets about three quarters of its wheat from Ukraine and Russia. Turkey, 85%. Saudi Arabia, nearly half. And these are major consumers of wheat. And so it's going to be much more difficult to make up that shortfall. Right, because that level of dependence is remarkable. So let's talk about what it means for some of these individual countries to lose

access to something like wheat from both Ukraine and Russia and how we expect this to play out now that the war is so well underway. Well, it's a crisis, but it may not be the kind of crisis that you think. So there is wheat on the market. And fortunately, there are also stockpiles in many countries that will enable places to get by in the near term. But the real problem is the prices. And we should note that before Russia invaded Ukraine, food prices had already hit an all-time high for the world. They were soaring because of rising energy costs. There were shipping disruptions related to the pandemic. And there were a number of extreme weather events,

including droughts in Brazil and Argentina and in East Africa and flooding in China, which altogether were creating a significant increase in global food prices. And then the war arrived. And so just to give you a sense, wheat prices over the past year are up 61% and 12% since Russia invaded. Now, this really matters because it means that regardless if you get your food from Russia or Ukraine directly, you're still paying more for your food. And while that may mean a higher grocery bill for many people in the United States or in Europe, it is a question of whether to eat

at all in other countries and in other places. So let's look at a place like Yemen, which gets about 30% of its wheat from Ukraine. Yemen has been stricken by hunger for years since the civil war broke out in the country. And right now, 17 million people are hungry in Yemen, according to the World Food Program, the agency of the UN. The World Food Program says that it feeds 13 million people in Yemen right now, including 5 million who are on the edge of starvation. In January, the World Food Program already reduced rations by half for the other 8 million people who they feed there, who are hungry but not starving. Because of the rising prices? Because of the rising prices before the war. And now with prices continuing to rise after the invasion, the World Food Program is preparing to

cut rations further there and potentially cutting millions of people in Yemen out of their program altogether. David Beasley, the head of the World Food Program, told me that the idea is they're taking from the hungry to give to the starving. Wow. And to make matters worse, the largest supplier to the World Food Program, which feeds more people than any other agency in the world, is Ukraine. They get about half of all their wheat from Ukraine. So the safety net for the world's hungry itself is being hurt by its dependence on Russia and Ukraine and the fact that they are both now being cut off. Exactly. And now the question is, what happens?

And traditionally, when you talk to economists about high food prices, what historically has happened is the market has fixed itself. When food prices are high, farmers are drawn to plant more, to chase the high prices, and the higher supply brings the prices down. to chase the high prices. And the higher supply brings the prices down. But the problem is, to get a good wheat crop, you need fertilizer.

We'll be right back. So Jack, you've been telling us just how reliant the world is on wheat from Ukraine and Russia. Just how reliant is the world on their fertilizer? Well, Russia is the world's single largest exporter of fertilizer. It accounts for nearly 15% of the world's exports. And now because of sanctions, most of that fertilizer is stuck. So we've already talked about record increases in food prices, but prices of fertilizers have risen even faster. The cost of all the major fertilizers have doubled or even tripled over the past year. And many of them are now at all-time highs, in large part because of soaring energy prices. And let me explain. So the most important fertilizer, a nitrogen-based

fertilizer, is essentially made with natural gas. And because natural gas has almost doubled in some cases, that has made it unprofitable for some fertilizer plants to produce. And so across Europe, what we've seen over the past month is many major fertilizer plants are restricting capacity or shutting down altogether. And we already had a squeeze in the supply of fertilizer because ahead of the Winter Olympics, China was curtailing its production of fertilizer. And that's because many major Chinese fertilizer plants are coal-fired, which produce a lot of pollution.

And as part of their blue sky policy to reduce pollution ahead of the Olympics, they cut production. So as a result, what we essentially have is a fertilizer crisis. And that is threatening to worsen what is already becoming a crisis in food. Right, because as you said, the answer to a food crisis is planting more food, but you can't plant all that more food if you don't have the fertilizer. So this is a deeply self-reinforcing crisis. Exactly.

And what economists and officials are worried about is that the high fertilizer prices are going to cause farmers to apply less fertilizer. And less fertilizer means worse crops, crops that are less in quantity, less in size, lower protein. And when you have, let's say, corn and soybean, for example, you know, crops that are often fed to animals. When they have less protein, we're going to have skinnier cattle, skinnier hogs. And that means higher meat prices. So there are all sorts of cascading effects. And this is already playing out.

cascading effects. And this is already playing out. So for example, I spoke to a farmer in South Texas, and he told me that because of high fertilizer prices, he's already stopped applying fertilizer to his pastures. And what that means is the hundreds of cows that graze there are likely going to end up skinnier come slaughter. And that means he'll have less meat to sell and less supply means higher prices. And when this plays out across the world, it means that fertilizer could end up resulting in even higher and higher prices. So just to step back and put all this together, we begin with wheat locked up in Ukraine and Russia that can't reach many countries that rely so heavily on it. As a result, their wheat prices are higher.

And then we get fertilizer, which could help solve the problem, but it's locked there, so prices for that go through the roof. And when you put those two things together, every element of the global food supply is more expensive, which in a place like the United States is a matter of higher prices at the checkout line. And it sounds like in a place like Yemen, very quickly becomes a matter of life and death. So I think it's important to remember that when food prices go up, it disproportionately hurts the poor. So even in the U.S., if you're poor, you don't have a choice. You buy food. And when food is more expensive, you know, you cut back on other things, including maybe things like healthcare or education. Now, in wealthier countries, there are going to be safety nets that are going to

prevent this sort of hunger that we're seeing increase in other parts of the world. But there are other ripple effects. So for instance, there are studies that show clear links between political and social upheaval and rising food prices. And in fact, the Arab Spring was in part sparked by high food prices. And already in Tunisia and Egypt, we're seeing signs of unrest because of the cost of food. So this really could have much larger ramifications all over the globe. So it feels like the solution to everything we're talking about here is for the war to come to an end, that that would alleviate most of it. It would certainly help a great deal, but even then, a solution will take time. So the World Food Program says that even if the war stops tomorrow,

they believe the food market will take six to nine months to fully recover. And what we also know is politically, it's unlikely that sanctions would disappear with the end of a war. And so a lot of the issues related to fertilizer and high energy prices likely would still persist. So what you're describing is now locked into the global food supply for what sounds like almost a year, if the war were to come to an end, which it hasn't. Exactly. And if the war drags on, there's something else to be really worried about. And that's the next crop in Ukraine. So the world already is essentially going to go without a lot of the current year crop. But the Ukrainian wheat has been planted and there now are concerns about the ability to harvest it and the ability to plant the next crop. Right. And that could last a lot longer than nine months or 12 months.

Correct. That means that this food crisis would drag on for potentially more than a year or two. And Jack, when you talk to people in Brazil, where we started this conversation, what do they say about all this and how acutely now are they feeling it? So here in Brazil, there is actually more frustration with the sanctions in many cases than the war itself because they want to get fertilizer from Russia. And in fact, what we're now seeing in these later weeks of the war is that Brazilian agriculture companies seem to be starting to figure out how to get fertilizer out of Russia, getting around sanctions. And so that may be good news for food,

but it also spells bad news for the political realities of the war and diplomacy. Right, because the point of those sanctions is to keep countries from doing trade with Russia. And it sounds like what you're saying is that frustration in Brazil over the impacts of those sanctions is now running so high that people just want to work around them, which is not a good sign for all the countries trying to hold Russia accountable for this war. really tricky question about sanctions on Russia, because as we've already discussed, Russia is such an important producer of food and fertilizer. So it does raise an important question that as the war drags on and as the food crisis becomes worse, does it shift anger? Does it shift sentiment

against the sanctions and against the West's response to the war in a way that could meaningfully impact their ability to try to combat the war diplomatically with sanctions. Right, because if people are asked to choose between punishing Russia for invading Ukraine and their next meal, it doesn't seem like there's going to be a huge debate. They're going to choose their next meal, it doesn't seem like there's going to be a huge debate. They're going to choose their next meal. So I think much of the world wants to stand with Ukraine. They want to punish Russia. They want to show that it's not okay to invade another country. But I think how some countries like Brazil are responding to this moral dilemma is a sign of what countries will do

when food is at stake. We've seen a number of countries start to implement export restrictions. So Turkey, Hungary, Indonesia, Argentina have all made it more difficult to send out food since the war began because of their concerns. Essentially, they're hoarding the food they have. Exactly. So that means that whether it's getting around sanctions or this hoarding of food, I think what this war and the efforts to punish Russia are showing is that disrupting the global food supply has really profound consequences because countries will do really unexpected things when you threaten their ability to feed their people. Well, Jack, thank you very much.

We appreciate it. Thank you, Michael. We'll be right back. Here's what else you need to know today. to another day. On Monday, global outrage intensified over what appeared to be Russia's execution of civilians in the Ukrainian town of Bucha, prompting several leaders, including President Biden, to describe them as war crimes and to call Vladimir Putin a war criminal. This guy is brutal. And what's happening in Bukha is outrageous. And everyone's seen it. Images from Bukha, taken in the days after Russian troops withdrew from the town,

showed scores of dead civilians, some with their hands tied, others buried in pits. with their hands tied, others buried in pits. In response, Germany and France expelled 75 Russian diplomats, and European leaders called for tough new sanctions against Russia, including on its oil and coal industries. In Moscow, Russian officials denied any role in the civilian deaths, threatened to prosecute anyone who publicly blamed Russia for the killings, and claimed that the bodies had been placed in Bucha after Russian forces had left. But a review of videos and satellite imagery by the New York Times shows that many of the civilians were killed more than three weeks ago,

when Russia's military was still in control of the town. Today's episode was produced by Asta Chaturvedi, Rob Zipko, and Rachel Quester, with help from Michael Simon-Johnson. It was edited by Liz O'Balin, contains original music by Chelsea Daniel, Dan Powell, and Marion Lozano, and was engineered by Chris Wood. Our theme music is by Jim Brunberg and Ben Landberg of Wonderly.

That's it for The Daily. I'm Michael Bilboro. See you tomorrow.