Looming global grain shortage due to Russia-Ukraine war expected to impact Israel as well

Experts fear that a protracted conflict in Ukraine could dramatically undermine production and supplies of grain and other crucial food products, unleashing a global food crisis due to the critical roles that both Russia and Ukraine play as major agricultural exporters.  

Some are predicting that a supply crisis could drive food prices up as much as 20% and shake food security in both impoverished and developed nations alike.

Dubbed the "breadbasket of the world," Russia and Ukraine account for nearly a third of the world’s wheat and barley exports. The World Bank said that the war is already "a major shock for global commodity markets, reflecting the region’s importance in those markets."

"Food prices were already high before, and the war is likely to drive most food prices even higher," according to the World Bank website. "Commodities likely to be most affected are wheat, maize, edible oils, and fertilizers. Global commodity markets face upside risks through the following channels: reduction in grain supplies, higher energy prices, higher fertilizer prices and trade disruption due to shutting down of major ports."

With a distance of some 3,000 miles between Jerusalem and Kyiv, the war in Ukraine feels deceivingly distant from Israel. However, the Israeli food industry is heavily reliant on Ukrainian supplies. 

The Jewish state imports almost half of its wheat from Ukraine. Jerusalem’s reliance on Ukraine extends to much of its corn products, barley and soybeans, as well as feed for cows, chickens and turkeys.

Ranked as one of the world’s most expensive countries to live in, an increase in food prices would disproportionally hurt the poor in Israel. Israel stands out among developed OECD nations for its proportionally high number of citizens defined as poor. Some 1.9 million Israelis – more than 20% of the total population – and almost one third of all Israeli children, reportedly live in poverty, according to an Israeli National Insurance Institute report published in December.

Food insecurity and prices had been rising in Israel even prior to the Russian invasion of Ukraine, largely due to the devastating economic impact of successive lockdowns that ruined many Israeli small businesses during COVID-19.

Other countries in the Middle East are even more dependent than Israel on Ukrainian food supplies. Egypt imports a whopping 85% of its wheat consumption from Ukraine and Russia. In 2020, Cairo spent $3.2 billion to import 12.9 million tons of wheat for its large and growing young population. Following Russia’s invasion of Ukraine, the Egyptian government recently announced that it would seek to diversify its import sources of the critically important wheat.

Seeking to calm his citizens, Egyptian Prime Minister Mustafa Madbouly stressed that Cairo would stock up with enough supplies to last through 2022. 

“I assure all Egyptians that we won’t have any crisis at all or be compelled to buy from the international market until the end of this year. I am talking about the citizens’ basic needs concerning the bread loaf, we as the Egyptian state won’t be pressured at all to buy any shipments under the current price surges as we will have a stock that will cover our needs until the end of 2022,” Madbouly said. 

Lebanon, a country already struggling with a severe financial crisis, recently announced that it would be rationing wheat and prioritizing crucial bread production due to the Ukraine crisis. 

“We will only be using wheat for the production of bread until we can ensure alternative sources of grain imports from Canada and others,” tweeted Lebanon’s Minister for Industry George Boujikian on Saturday.