Fertilizer Shortage Will Drive Global Food Prices Higher as Ukraine War Drags On

As global inflation continues to grow, people across the country are finding it difficult to buy nutritious food. Low-income individuals already spend a significant amount of their income on groceries.

The U.S. Department of Agriculture projects that between April 2021, and April 2022 there will be a total of 1.2 million people. food prices increased by an average of 9.4 percent. Restaurant prices were slightly higher than grocery prices, but that does not include restaurants prices. Grocery and supermarket prices were 10.8 percent higher in April than the previous year. The department’s Economic Research Services estimates that these prices will increase a further 8 percent this year.

This isn’t just an American problem. Globally, the disruptions to supply chains triggered by the pandemic, the rolling environmental catastrophe of climate change, and the war in Ukraine — which has bottled up millions of tons of vital supplies of wheat in blockaded Ukrainian ports and also led to a massive shortage of fertilizer — have combined to wreak havoc on food markets. The UN’s Food and Agriculture OrganizationIn recent months, prices for cereals, milk products, meat, sugar, and vegetable oil have reached record highs around the globe. Since Russia and Ukraine between them account for nearly a quarter of the world’s wheat exports, economic embargoes against Russia, combined with Russia’s blockade of Ukraine, risk a global food calamity on a scale not seen in decades.

The UN estimates that war alone could cause a dramatic increase in global food prices. 22 percent. It also estimates that Russia supplies up to 30% of fertilizer supplies to many countries, including large numbers in Latin America, Eastern Europe, and Asia. These countries are at risk of losing their food security as a result of international efforts to isolate Russia. This is a consequence of Russia’s actions in Ukraine. Shortages of fertilizer have led to soaring pricesSome fertilizers are now being sold on the global market at much higher rates than they were in 2008. This was when the financial system experienced huge price swings and the financial system went into a swoon that would cause it to collapse. As fertilizer prices rise in many countries, domestic agricultural production will take a big hit. This will happen at a time when the import market for food staples faces unprecedented stress.

In countries such as EgyptRussia and Ukraine account for roughly half of the country’s wheat imports. This makes the possibility of hunger and even bread riots all too real. Last month, Egypt negotiated a deal to secure Ukrainian wheat exports via rail shipments into Poland, and, from there, via ship to Egypt, but it’s by no means clear that the movement of grain by rail will be of a scale necessary to plug the gaps caused by Russia’s blockade of Ukrainian sea ports.

According to the UN, Lebanon imports most its wheat from Ukraine in a normal year. More than 90 percent of Somalia’s wheat imports come from Ukraine and Russia. Almost all of Eritrea’s wheat imports come from these two countries, along with more than 85 percent of Turkey’s wheat imports. The list goes on. The scarcity caused by the war, combined with the soaring prices, will, inevitably, push many of the world’s poorest, most vulnerable people further into insecurity and hunger.

Last year, the Global Report on Food Crises found that 193 million people spread across more than fifty countries were “acutely food insecure.” That was a staggering 40 million more than in 2020, which in turn was higher than the pre-pandemic numbers. The 2022 report warns that the world’s food situation is likely to further deteriorate due to Russia’s invasion of Ukraine.

This won’t immediately translate into mass hunger or food shortages in the U.S. The food distribution system in this country — combined with the massive, life-saving presence of the Supplemental Nutrition Assistance Program (SNAP) and a well-oiled food bank and food pantry distribution system — is too robust to see mass food shortages anytime soon.

But that doesn’t mean that millions of Americans aren’t suffering tremendous economic dislocation as their weekly grocery bills continue to rise. Meat pricesParticularly, the last couple of years have seen spikes in the following: USDAEstimates suggest that beef prices could rise by as much as 16 percent this year. The price of poultry will likely rise by more that 12 percent. However, prices for many other staple foods are on the rise: The USDA estimates that eggs will increase by 11 percent and fresh fruits by more than 10%.

These price increases can be a nuisance for middle class people but they are manageable. Let’s face it, these price increases are an inconvenience for middle class people. most Americans, accustomed to endless supplies of cheap things to eat, spend less than 10 percent of their total income on food. But people in the bottom quintile of earnings in the country spend far more — close to 40 percent of their pre-tax income — on buying groceries. This is closer than the average American’s food spending at the beginning of this century and what the average American spends on groceries during the third decade of this century.

In the past, rising food prices have been used as a trigger or predictor for political upheaval. It was, for instance, inflation in the bread markets that helped create the conditions for the French Revolutionin the years before 1789. The United States is currently in political turmoil. Political volatility will only increase with the huge rises in food prices this fiscal year. This could push more Americans in a progressive direction, building support income subsidies, progressive taxes policies, and the like.

However, discontent could also flow into the pool right-wing populism. This is the politics of resentment, and of scapegoating, from which former President Trump emerged. A mantle that an increasing number hard-right politicians are now taking as their own. Low-income families are already facing rising fuel and housing prices, and immediate economic pain due to rising food costs. Their daily lives are already a high-wire act. Any unexpected expense is a potential crisis, and they have to adjust their lives accordingly. This sense of economic insecurity is exacerbated when food prices are high.