However, when it comes to serious economic consequences, it strikes me that what matters more about this Russia-Ukraine conflict than the impact on energy prices is the impact on food prices. Western politics and the media have not yet fully understood the pivotal role of Russia, Ukraine (and Russia’s Belarus) in global agricultural supply chains. World food prices soared by almost 13% in March alone, according to the Food and Agriculture Organization (AEO) price index, largely due to the effects of the conflict. Both Russia and Ukraine are major producers of wheat, barley and other crops – millions of tonnes are exported through Ukraine. Typically, about a third of world grain exports are shipped from Black Sea ports, exports of which have virtually collapsed. With the right political arrangements in place, fuel supplies can be strengthened fairly quickly. Energy embargoed by Russia (or Iran) could be released on world markets or the Saudis could reverse the tide, bringing prices back into the stratosphere. However, crops need to be planted and animals raised over time – and this Russia-Ukraine conflict is intertwined with that. Not only is planting in Ukraine itself being severely disrupted, but as this war and related sanctions increase fertilizer prices, so does planting far beyond. Russia, Ukraine and Belarus account for about two-fifths of the world’s potash exports, and among them export almost a third of nitrogen and phosphorus fertilizers. Almost all of these exports are now hampered by either sanctions or conflict – one reason UK farmers are paying up to five times more for fertilizers than last year. So at a time when UK food security is at the forefront, British farmers – affected by both spiral fuel and fertilizer prices, their two main costs – are now planting less, not more. Rising prices for raw materials, which are again linked to the spiral prices of wheat and cereals, meanwhile are causing prices to rise not only for bread, but also for eggs and milk. Having said all that, the most serious economic consequences of this Russia-Ukraine conflict, outside of Ukraine itself, will be felt beyond the West. The world, to a large extent, still eats crops harvested in 2021. We will soon turn to the food produced this year. But high fertilizer prices mean they are now planted far less – storing a severe calorie deficit. Already, in Egypt, the jump in state aid needed to make traditional bread accessible to the poor is burdening the Cairo government’s budget. In Turkey, cash-strapped buyers are queuing up to buy cheap government-issued bread, which is no longer available on the open market. The Arab Spring – the series of protests and armed uprisings that spread across North Africa and the Middle East in the early 2010s – was triggered and largely sustained by spiraling food prices. These areas are heavily dependent on huge crop shipments, mainly from Russia and Ukraine.
