World faces food crisis due to Russia-Ukraine war/China has stockpiled massive amounts of food/

wars bring enormous suffering as well as terrible economic consequences these consequences include the direct economic impact and the ones caused by sanctions in this episode we look at a key area the global food supply in china's stockpile the global food system was strained even before the russia ukraine war broke out chaotic supply chains and unpredictable weather had already pushed food prices to their highest levels in about a decade more than 20 days after russia's invasion of ukraine with no sign of a ceasefire the world is now facing a food crisis as prices of key agricultural products from the russian ukrainian region have spiked maybe you want to buy something now in bulk you cannot buy it now you just have to pick some things fifty things for children to eat for us to keep our life move move our life on so that's what we are doing now so we just pray things will be better we just great things will be better things are worse now russia is the world's largest exporter of wheat while ukraine ranks fifth together the two countries account for 19 of the world's barley supply 14 of wheat and 4 percent of corn that's more than one-third of global grain exports the two countries are also major suppliers of rapeseed accounting for 52 percent of the world's sunflower oil export market in the same highly concentrated global fertilizer supply chain russia is a major producer foreign we are on a situation which is extremely problematic uh but still very uncertain and the reason why i'm saying this if it is correct as you said that russia and ukraine supply 30 to the extract of the wheat in in the world a part of those of that production of those exports were already delivered today if we look just at the crane we have seven million metric tons of wheat to be delivered which is 29 of the overall exports over the year and in the case of maize we have 12 million metric tons which is 36 percent of the overall maze production what this means is that we have a gap of around in serials of around 20 million metric tons now the issue is can this be covered by other countries other key exported countries like the u.s australia and now india saying that they are going to export seven million metric tons of wheat or argentina uh so that's the question right now and if that is the case then that can be the problem can be smoothed out and we shouldn't go into a significant crisis since the conflict ukrainian ports have been unable to export grain and grain traders have avoided purchasing from russia due to financial sanctions this is the time of the year when arable land recovers from winter and grows rapidly but ukrainian farmers have no way to plant for the spring in other words the wheat growing season in ukraine will be interrupted by the war moreover it isn't clear whether there will be enough farmers to cultivate the land global wheat prices are at an all-time high soaring natural gas prices have contributed to the problem of tight fertilizer supplies natural gas is a key ingredient in nitrogen-based fertilizers such as urea yara international headquartered in norway is the world's largest supplier of mineral fertilizers according to cnn record high prices have forced the company to cut its ammonia and urea production in europe to 45 of capacity its ceo predicts that the reduction in these two essential ingredients will have an impact on crop yields which will have a ripple effect on the global food supply russia and belarus are major exporters of fertilizers belarus is under sanctions as well as being held accountable by the west for supporting russia it is now likely that the vast majority of traders and buyers in this market will be scared of the risks of potential sanctions that they won't approach russian or belarusian products many european and central asian countries used to get more than 50 percent of their fertilizer supply from russia take growing wheat as an example wheat in ukraine was sown last fall after a short growth period the plant went into winter rest now at this time of the year farmers must apply fertilizer to help the wheat plant break out so that a plant can branch out at the stem node and produce more wheat years with proper fertilization each wheat plant can branch out three to four stalks multiplying the harvest however under the impact of war ukrainian farmers are now short of fertilizers and pesticides and even if they have fertilizers they lack the fuel to start the farm machinery some analysts have estimated that this year's wheat harvest in ukraine may be sharply reduced by at least half on march 12 the ministry of agrarian policy and food of ukraine announced that the government has decided to temporarily ban exports of all types of fertilizers chris lawson head of fertilizers at market intelligence firm cru group said current urea is trading close to 1 000 us dollars per metric ton about four times the price at the beginning of 2021. on march 14th andre malnichenko a billionaire in the russian fertilizer and coal industry said through a spokesman that the events in ukraine are a tragedy and that peace is urgently needed as a russian belarusian and ukrainian it is very painful and inconceivable to witness the war and death between brothers according to the report melinchenko is a russian national but was born in belarus and his mother is ukrainian according to melnichenko one of the biggest victims of the crisis will be agriculture and food the conflict has already caused fertilizer prices to soar and farmers can no longer afford it the supply chain disrupted by the outbreak has become more distressed which will lead to higher food inflation in europe in food shortages in poor countries for example ghana imports nearly a quarter of its wheat from russia according to data from the observatory of economic complexity the inflation has been disastrous for bakeries whose sale prices are standardized by the national bakers association and have not risen since august many have had to reduce portion size or illegally hike prices to stay afloat really the whole thing started from last year june coming every month they will increase flour not just flour sugar my drink all things that we need to produce bread have been increased some on monthly or weekly basis and it's really really really affecting the bakery industry whenever you are trying to stand then an increment will come then you need to go back again we have putting so much into it we have sacrificed we have been through a lot so if this should bring it one end then yeah spending your whole life for the past 25 years working and they're just a short month or a year something would that hit you to be out of business or your business is not doing well it is very painful in order to protect the stability of the domestic grain market supply on march 10th the russian government decided to ban the export of cereals including wheat rye barley and corn to the countries of the eurasian economic union until august 31st 2022 on march 14 the russian government temporarily banned the export of grain commodities to the countries of the eurasian economic union and the export of sugar products to third countries the ban on grain exports will be in effect until june 30th and the ban on sugar products until august 31st on march 11 the food and agricultural organization of the united nations released a report indicating that international food and feed prices could rise as much as 22 percent due to the russian ukrainian conflict it also said that russia and ukraine are expected to see a decline in food exports only a portion of which will be replaced by other sources many least developed countries depend on these two countries for most of the wheat supplies for example egypt and turkey get about 70 percent of their wheat supply from russia and we need to diversify the countries from which we import wheat definitely we will resort to more expensive countries that export wheat which would sell to us at prices that are not as cheap in russia and ukraine like france germany or other therefore if the conflict is prolonged and supply is less this will add pressures on balance of payments or the budget lebanon imports 90 of its wheat and cooking oil and they come exclusively from russia data released by the world bank shows that the wheat stock in lebanon is only enough to last a month and a half this situation sets off an alarm for the world the cost of corn soybeans and vegetable oil has also been rising this is despite the fact that the u.n food and agricultural organization has urged major food producing countries to refrain from imposing export restrictions on their own products but countries have begun to reduce exports due to fears of shortages egypt has just banned exports of wheat flour lentils and beans as the country becomes increasingly concerned about its food reserves indonesia has tightened its export restrictions on palm oil palm oil is an ingredient in packaged goods such as cooking oil cosmetics and chocolate on march 10th lebanon announced a ban on the export of food products produced in lebanon that are not covered by a special permit issued by the ministry of industry some countries are less at risk such as switzerland while the rest of europe grapples with surging prices in switzerland inflation is so tame that some key costs are actually falling switzerland has um one of the strongest protection of the agriculture sector in the world after south korea iceland norway uh japan so we are a heavily protected farm farming industry and this has led to high prices of food in general in switzerland and again similar to the fact i've mentioned before on the oil price the same mechanisms apply also to food prices we are high level but we have a strong swiss franc we have to spend less on imported food in relation to the whole spending of the population and therefore the the result for the consumers are not that drastic as they are maybe in other countries so what is the situation in china at the end of 2021 statistics from the u.s department of agriculture or usda showed that china had more than half of the world's stocks of corn rice wheat and other major grains by the first half of 2023's grain year china's share of global grain stocks will be 69 for corn 60 for rice and 51 for wheat according to the usda's projected data china's share of these major grain reserves has increased by about 20 percent in each category over the past 10 years indicating that the ccp is continuing to stockpile grain china's population is less than 20 percent of the world's population yet it holds half of the global grain stocks it's disproportionate many experts are concerned that it could push up global food prices and trigger food shortages elsewhere the director of japan's institute for resources and food studies believes that china's large grain reserves are one of the reasons for higher global food prices we have no way to verify whether the massive stockpiling of grain by the ccp a year ago is related to the war in ukraine that broke up this year truth be told that china does have a problem of food shortages chinese president xi jinping mentioned in a recent meeting on march 6 2022 that some people say that international supplies are plentiful and that it costs more to grow them than to buy them but the land in china isn't planting soybeans corn or cotton when the international market gets bad it will then be too late to grow one's own he said with food in our hands there is no panic in her heart a week ago she expressed a similar idea saying that the rice bowl of chinese people should be filled with the grain grown in china according to official statistics from china in 2021 its total grain production was 682 million tons and imports were 164 million tons with an external dependence of nearly 20 percent in china grains are classified into three types grains soybeans and potatoes the supply of wheat in china is not a big problem soybeans however are problematic because of the high dependence on foreign imports currently china's soybean imports come mainly from the u.s and brazil accounting for 70 to 80 percent of china's soybean imports with a small amount imported from russia in the past china's northeastern provinces were the main production areas for soybeans but it faces strong competition from the genetically modified soybeans from the u.s that offer lower prices and higher oil content along with the low procurement price for domestically produced soybeans in china many farmers have given up growing soybeans one of our episodes discussed haegong the first city that went bankrupt in china it's located in one of the three northeastern provinces heigong is virtually a snapshot of how the economy of the three northeastern provinces of china has gone into serious decline china has always been short of food due to institutional factors on the one hand large tracts of good land have been polluted by industries or used as industrial land on the other hand the ccp's policy of suppressing food prices coupled with draconian taxes has discouraged farmers from planting grains a large number of migrant workers whose majority is from rural china are moving to the cities leaving many arable lands deserted and causing the systematic shortage of food supply in the face of the food crisis brought about by the war china will inevitably be affected only the magnitude of damage will be relatively small compared to some countries on february 23rd the day before russia announced that special military operation the shanghai representative of the ukrainian chamber of commerce and industry received an email from his ukrainian supplier he was told that his goods were ready to ship to china but everything was put on hold since the sudden outbreak of armed conflicts the crisis affected practically all logistic channels and supply chains the impact of the conflict is terrible one of our partners had booked over a dozen containers of goods which had been prepared for shipment but the supply chains have all been broken while our inventory has sold out everybody has been waiting for the supply [Music] you