Over the past 20 years, Russia, Belarus, and Ukraine have become major suppliers in global grain and agricultural markets, producing between 20 to 30 percent of a range of primary products, including wheat, corn, barley, canola, sunflower oil, pulses, nitrogen-based fertiliser, and potash.
Rabobank noted that given the impossibility of estimating how much grain and other agricultural products Ukraine will be able to produce in the coming growing season—even with conservative modelling estimates—it was likely there would be a shortfall of grain and feed, which could pose a severe threat to global food security.
"The world has not yet fully felt the heavy absence of Ukraine's supplies," the report said. "However, this is about to change from July onward."
"In years when global grain supply has fallen 40 to 50 [million] metric tonnes below trend consumption in one season, the historical trend has been that the global food price index rises to very high levels. The most recent Ukrainian crisis has pushed the FAO Food Price Index to a record high, as heavy supply losses in the world market have been expected."
Food Shortage Could Spark Political InstabilityOn May 13, Indian authorities said it would ban the export of wheat, effective immediately, to shore up its own food security.
"If everyone starts to impose export restrictions or to close markets, that would worsen the crisis," he said. "We call on India to assume its responsibility as a G20 member."
Matt Dalgleish from market analysis firm Thomas Elder Markets in Australia said that the Ukrainian-Russian conflict has definitely pushed some import-reliant countries to the point of desperation.
"Countries that are on our doorstep, like Indonesia, that have a huge population and are struggling for self-sufficiency in terms of their [own] self-sufficiency, they could have problems," Dalgleish told The Epoch Times. "In the Middle East and North African area—like Algeria, Libya, and Egypt—they are all countries susceptible to food risk and food insecurity."
Dalgleish said due to the lower income levels in those countries; much of the population already spends a higher proportion of income on food-related matters, and as grain supplies drop, prices could rise as countries compete for supply.
"When people become food insecure, that's a very quick way to get civil disobedience and instability within a country," he said.
Global Recession FearsFertiliser prices reached an all-time high in April 2022, according to Rabobank, after supplies from Belarus and Russia were restricted. Australian producers could be left struggling to find enough of the product to support crop growth and meat production
"With Europe likely to reduce Russian energy imports further with a ban on Russian oil imports by late 2022, and with Russia preparing legislation to disrupt commodity exports to countries that impose sanctions or supply Ukraine with weapons, we expect energy prices to stay volatile and high," Rabobank said. "While oil prices above USD 100/bbl already feel expensive, a further greater than 50 percent price upside is possible as a consequence of those sanctions."
Dalgleish says these pressures on the agricultural and transport sectors will cause further inflationary pain for countries like Australia and the United States, with the analyst warning that the world could head towards a period of recession similar to the 1970s.
"If you're looking at developed economies that are really crucial for world growth, they're seeing the impacts of these inflationary factors, and for them, it is starting to reduce their GDP and economic growth," he said. "I think there is a risk of recession and potentially stagflation globally."