Saturday, May 21, 2022

The Ukraine Invasion And The Global Food Supply





How the Russia-Ukraine War and China’s Supply Chain Will Make Food the Most Expensive Commodity Ever Russia appears unconcerned about what would be considered one of the harshest economic consequences and sanctions a country could face, owing to the fact that it has been working on these plans for quite some time. While most people thought Russia’s war was rash, given how long the country has remained at war, every move Russia has made appears to have been calculated and meticulously planned out over time. ..............

Russia reacted by prohibiting wheat and agricultural fertilizer exports to all countries except its ally, Belarus.

......... China’s ban on food exports due to food scarcity, and you have a volatile global situation that shows no signs of abating. The cherry on top is a Chinese supply chain bottleneck, which should make you sit up and take notice. ......... Ukraine missed its sowing season, resulting in the country’s worst food crisis since World War II. ......... Russia and Ukraine account for approximately 30% of global traded wheat and 12% of world’s total combined calories each day. ........... His war has resulted in port blockages, preventing supply chains from reaching Ukraine, which has long been known as Europe’s breadbasket. ........ many businesses have fled Russia and Belarus. Maersk, the Danish shipping conglomerate that owns roughly 17% of the world’s container ships and operates 75 ports and terminals in 42 countries, has announced plans to close its offices in Russia and Belarus, as well as to cease commercial operations and interactions, by the summer of this year. To make matters worse, Russia is the largest exporter of fertilizer materials, followed by China. .......... Russia, the world’s largest fertilizer exporter, accounts for : 40% of ammonium nitrate exports ........ Russia controls 40% of the world’s potash trade with its ally, Belarus. ........ Since the beginning of 2022, Nitrogen, ammonia, phosphates, nitrates, urea, and sulphates have all increased 30% in price. ......... The (UN) Food and Agriculture Organization predicts food prices will rise by 20% as a result of the war and the Chinese lockdown. ......... 283 million people in 81 countries are facing a severe food shortage. 45 million people are on the verge of starvation. Food scarcity will disproportionately affect developing countries. India is one such example. .......... The developed world may not feel the heat immediately, but it will in the long run. Food inventories and prices will shift, and economic shock waves will ripple around the world, putting enormous strain on the farming community. China and Russia are the leading producers of three major fertilizer components, followed by Belarus, a Russian ally. The United States relies heavily on fertilizer imports, ranking second among the three major fertilizer components. .............. To move food/goods across the continent, the world has relied on China and its highly functional supply chains. The Chinese lockdown, on the other hand, completely altered the situation. Global supply chains have come to a halt. Furthermore, we know that increases in freight fares will raise global food prices in the short and long run. ......... The country is taking precautionary measures to facilitate mass testing as it deals with the Coronavirus, which has shut down 87 of the top 100 cities by GDP. ......... Grain prices in China increased by 5% in March as a direct result of the Ukraine conflict. ......... Russia has effectively blockaded all of Ukraine’s ports, halting wheat transportation and exports, but it has also cut itself off from the West. There is little movement in its supply chains that connect it to the rest of the world. ......... China, on the other hand, has caused highways and ports to become congested, workers to abandon their stations, and factories to remain closed. Global supply chains are so interconnected that a disruption in one node has repercussions all over the world. One out of every five container ships is now stranded at ports around the world, with China accounting for 30% of the backlog. .......... Until recently, the vast majority of container ships were bound for Shanghai, the world’s busiest port. However, if the lockdown is not lifted within the next few weeks, Shanghai will be excluded, with many sailings cancelled, and the impact on supply chains will be severe, affecting even your neighborhood’s day-to-day necessities. .......... it will take months for supply chains to return to normal, with major disruptions to US ports expected in the near future. .......... “The rest of the world assumed Russia’s primary exports were oil, LNG, and wheat. However, if Russia can effectively halt Ukraine’s (wheat) exports, causing global food prices to rise, and if Russia can effectively halt fertilizer exports, causing fertilizer prices to rise and farmers to use less, Russia has effectively set the stage for the world to go hungry.” ......... Global leaders are perplexed, unable to devise a clear, let alone unified, course of action. ......... Will governments subsidize much-needed fertilizer to help farmers ensure adequate food production and maximize food yield outputs during these trying times? ......... you cannot throw money at this problem and expect it to disappear.

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