The impact of Russia-Ukraine conflict on global food security

Faqin Lin, Xuecao Li, Ningyuan Jia, Fan Feng, Hai Huang, Jianxi Huang, Shenggen Fan, Philippe Ciais and Xiao Peng Song

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Ukraine and Russia are two important grain producers and exporters in the world, accounting for 12% and 17% of the world's wheat exports, respectively. The conflict between Russia and Ukraine may greatly impact Ukraine's wheat production and export as well as Russia's wheat export. Satellite observations have showed signs of wheat production reduction in Ukraine in the season 2021–2022. Considering the uncertainty of the conflict duration, we have designed three scenarios (i.e., slight, medium, and severe) depending on how the war would significantly impact the wheat harvest and trade disruption. From analysis of potential impacts of the conflict on global wheat market under the general equilibrium trade model, we have found that the conflict would lead to a trade drop (60%), soaring wheat prices (50%), and severe food insecurity with decreased purchasing power for wheat (above 30%) in the most severe scenario, especially for countries that heavily rely on wheat imports from Ukraine, such as Egypt, Turkey, Mongolia, Georgia, and Azerbaijan. Considering the role of Russia and Ukraine in agricultural input sectors including oil, natural gas, and fertilizers, especially Russia, the trade blockade caused by the conflict will give rise to price increase by 10%–30% and welfare decline by 15–25% for most affected countries. The conflict would put as many as 1.7 billion people in hunger and 276 million people in severe food insecurity. Food shortages, energy shortages and inflation have spread to many countries like dominoes which have fallen into trouble one after another with social unrest day after day. Our analysis also shows that countries including the United States, China, India, Canada, Australia, France, Argentina, and Germany would increase their wheat production and exports for the reconstruction of the global wheat supply pattern. The modeled results indicate that the conflict-induced global wheat crisis and food insecurity can be notably alleviated if these countries increase their production by 2%–3% in 2022–2023 and unnecessary trade restrictions are exempted.

Keywords: general equilibrium trade model; global food security; quantification; Russia-Ukraine conflict; wheat crisis (search for similar items in EconPapers)
JEL-codes: Q18 (search for similar items in EconPapers)
Date: 2023-03-01
New Economics Papers: this item is included in nep-agr, nep-cis, nep-int and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in Global Food Security, 1, March, 2023, 36. ISSN: 2211-9124

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