Russia Bombs Ukraine`s Grain Stores: Why Should South Africans Care?
- Russia launched airstrikes on Ukraine's grain storage facilities at Black Sea Port in Odesa, destroying tonnes of the country's grain
- Economists have warned the attack could adversely affect the African countries’ food security and destabilise their economies further
- Many African countries heavily rely on wheat supply from Ukraine to meet its market demand
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On Monday, 25 September, Russia unleashed airstrikes that destroyed Ukraine's grain storage facilities at the Black Sea Port in Odesa, dealing a big blow to dozens of countries that depend on Kyiv's grain to meet shortages.
"The attack resulted in the destruction of grain storage facilities and significant damage to the seaport," Economy Minister Yulia Svyrydenko said on X, formerly Twitter.
Recent reports indicate that Ukraine has lost nearly 15% of its grain storage capacity amid its invasion by Russia, threatening its role as a key food supplier to the world.
This is according to a new report by the US government-backed Conflict Observatory.
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The report reveals that the Russian military had seized 6.24 million tonnes worth of food storage capacity, and another 2.25 million tonnes of capacity in Ukrainian hands had been destroyed.
In total, the Russian invasion of Ukraine has removed around 8.5 million of Ukraine's 58-million-tonne storage capacity, threatening the country's future ability to get crucial supplies of wheat, corn and sunflower oil to the world market, according to the report.
"Russia and Russia-aligned forces' damage and seizure of Ukrainian crop storage capacity threatens to turn Ukraine's current agricultural crisis into a catastrophe," the report said.
Russia has continued to hit Ukrainian port infrastructure and grain storage facilities in drone strikes.
National Treasurer Kenya National Farmers Federation Ruth Maraba told Briefly News’ sister site, TUKO.co.ke that the impact of the bombarding of the Ukraine grain facilities by Russia will have ripple effects on the global market.
“It should be remembered that Ukraine and Russia are the biggest exporters of cereals globally and depend on them because our wheat is not enough to sustain us,” Maraba said.
The Chief Economist at the Agricultural Business Chamber of South Africa, Wandile Sihlobo, said South Africa would not be that severely impacted.
“We still import wheat, about 1.5 million tonnes from the world market each year, but the majority of wheat has already landed on our shores," said Sihlobo.
However, the Economist Dawie Roodt said that poorer countries would likely feel the brunt.
"Poorer countries will be affected by a further increase in grain prices, for example, and some countries are already experiencing real hunger,” said Roodt.
How much wheat does Africa import from Ukraine?
In 2022, South African imports from Ukraine were US$38.27 million (R734 million). Almost half of the imports were animal and vegetable fats, oils, and cleavage products. When it comes to grain, South Africa only imports about 4% from Ukraine.
Sihlobo explained that South Africa can look to other countries for grain if Ukraine is unable to supply, but that means purchasing grain and a steeper price.
Sihlobo wrote in his paper that the reason for higher prices is that Ukraine and Russia have strong ties with the global grains and oilseeds market because of their large export share contribution, and this has an important bearing on commodity prices.
Ukraine still plays an important role in supplying food sources to other African countries. A report by the Center for Food and Land Use Research at Kyiv School for Economics shows that out of 36 low-income food-deficit countries (LIFDCs) in Africa, 33 received food from Ukraine in 2021.
For example, in 2021, Kenya had enough supply of wheat on the market, and prices remained stable. However, when Russia invaded Ukraine in February 2022, it became difficult for Nairobi and other African countries to import enough wheat from Kyiv, resulting in a crisis.
Ukrainian ambassador to Kenya Pravednyk Andrii projected the drop in shipments to be approximately 138 metric tonnes.
"Russia's aggression has affected the supply of grain from Ukraine to Kenya in a big way. For instance, in 2022, we imported only about 138 000 metric tonnes compared to 355 000 metric tonnes supplied last year 2022”, said Andrii.
This caused a massive wheat shortage that resulted in price hikes, thus affecting consumer purchasing power.
The economy was badly hit as most businesses dealing in wheat products struggled to remain afloat.
Did the Black Sea Grain Initiative Help African countries?
African countries got a sigh of relief when the UN brokered the Black Sea Grain Initiative in July 2022, in which Russia agreed not to block Ukrainian grain from reaching African markets.
By March 2023, Ukraine had delivered 140 000 tonnes of wheat to Africa under this agreement.
However, Russia pulled out of the deal in July, throwing African countries under the bus.
"Food prices were stabilising following that agreement. However, the recent move by Russia to pull out means the shipment of wheat from Ukraine to Africa at large will face challenges, and this will definitely have an adverse impact on the prices of food," said Economist David Omenya.
The Monday attack on Ukraine's grain storage facilities could point to Russia's determination to stop food shipments from Kyiv to other countries, particularly Africa.
How will these bombings affect Africa?
Rising Wheat Prices
Ukraine is one of the world's largest exporters of wheat. Any disruption in Ukrainian wheat production and export can lead to a global shortage, resulting in increased prices.
Many other African countries, such as Egypt and Tunisia, import a substantial amount of wheat for their flour industry. Higher global wheat prices would lead to increased costs for African millers, potentially leading to higher prices for wheat-based products for consumers.
“Russia's airstrikes on Ukraine's grain storage mean two things: first, it confirms that President Putin's administration is not interested in the Black Sea Port Initiative and does not care about its impact on countries that depend on Ukraine for grain. Secondly, countries like Kenya should prepare for price hikes, especially if the damage is extensive," added Omenya.
Disruption in Corn (Maize) Supplies
Ukraine is among the top exporters of corn globally. Any disruption in the shipment of the staple crop could have an adverse economic impact on countries that depend on it.
A large portion of corn is used for human consumption as well as animal feed. As such, any shortage in global supply could lead to higher prices for these products.
Impact on sunflower oil
Sunflower oil is a widely used cooking ingredient in many households. If global supply declines due to disruption and destruction caused by the bombings, Africa will definitely face an acute shortage of these products, and prices rise.
Sihlobo says that Ukraine and Russia are large players in the global market, and a continued invasion of Ukraine will keep prices high.
Sunflower oil prices increased significantly following Russia’s invasion of Ukraine in South Africa, even though there were some speculations in prices.
Fertilizer shortage
South Africa's imports of fertilizers was US$1.51 billion during 2022. If the supply chains are disrupted, farmers may face challenges in accessing essential fertilizers, which could adversely impact crop yields.
These are some of the immediate adverse impacts that African countries are staring at following Russia's attack on Ukraine's grain storage facilities.
Coming at the time, the county was expecting a drop in food prices after more than 18 months of suffering, the impact, according to economists, could be more severe if not urgently addressed.
"Our only hope is that Russia stops the invasion and allows shipments of grain and food products from Ukraine," said the economist Omenya.
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Source: Briefly News
