MENA faces a crisis as the world’s key wheat producers are at war | Business and Economy News
Istanbul, Turkey – As two of the world’s key wheat producers face off in an all-out war, tomorrow looks grim for the Middle East and North Africa (MENA) countries that need wheat from Ukraine and Russia.
Russia is the world’s number-one wheat exporter – and largest producer after China and India – Ukraine is among the top five wheat exporters worldwide.
“The wheat harvest starts in about two months and this year’s yield is expected to be a healthy one, meaning abundant supply for global markets in normal conditions. But a protracted war in Ukraine can affect the harvest in that country, and therefore global supplies,” Karabekir Akkoyunlu, a lecturer in politics of the Middle East at SOAS, University of London, told Al Jazeera.
In addition, the planned expulsion of some Russian banks from the international SWIFT banking system in retaliation for Moscow’s invasion of Ukraine is expected to hit the country’s exports.
“At a time of global food crisis and supply chain disruptions due to the coronavirus pandemic, this is a real concern and it is already pushing prices up to record levels,” he said.
Rising prices, insufficient supply
Though Turkey domestically produces about half of the wheat it consumes, it has become increasingly reliant on imports, 85 percent of which come from Russia and Ukraine.
Ankara’s wheat imports from Ukraine reached record levels in 2021, according to official data from the Turkish Statistics Institute.
“The Turkish government says the country has the production capacity to make up for the loss in wheat imports, but even so, this will push up the costs significantly,” Akkoyunlu said.
“A protracted war will make a difficult year worse for the average Turkish citizen, who have already seen their bread get lighter but more expensive, and are having to pay record electricity bills.”
“Nearing an election year, this will increase the pressure on the [President Recep Tayyip] Erdogan government, which is losing ground to the opposition in most opinion polls,” he said.
In recent months, huge queues of people waiting to buy subsidised bread have popped up in different districts of Istanbul, as cash-strapped citizens trade their time to save a few lira on bread as soaring inflation and the battered Turkish currency have driven up costs and dealt a severe blow to purchasing power.
Rising prices and insufficient supply have already affected economically-depressed countries in the Middle East and North Africa that buy the bulk of their wheat from Russia and Ukraine, bringing them to the brink of crisis.
“Ukraine supplies a huge amount of the grain to most of these countries and a lot of these places are already on a knife’s edge. The least little thing that disturbs bread prices even more could really kick off a lot of turmoil,” Monica Marks, a professor of Middle East politics at New York University Abu Dhabi, told Al Jazeera.
“Unlike Turkey, most economies in the Arab world are heavily dependent on wheat imports. Egypt is far out on the dependent end of the spectrum. Egypt relies on Russia and Ukraine for 85 percent of its wheat imports, Tunisia relies on Ukraine for between 50 and 60 percent of its wheat imports,” she said.
Marks said that Tunisia is already “absolutely up against a wall economically … a lot of people in Tunisia talk about the potential for a Lebanon scenario, and they are not crazy”.
She cited reports that the Tunisian government has already been unable to pay for incoming wheat shipments, and said there have been widespread shortages of grain products such as pasta and couscous, which constitute a significant portion of the Tunisian diet.
Akkoyunlu also noted that Egypt, Tunisia and Lebanon, in addition to Yemen and Sudan are at great risk from a surge in prices and a spike in demand.
While war between Russia and Ukraine intensifies, a potential decrease in wheat exports from their fertile lands will be felt in vulnerable countries all the way from the edge of North Africa to the Levant.
Marks said that while Morocco is not as dependent on some of its neighbours on wheat imports, it is currently experiencing its worst drought in 30 years, resulting in a surge in food prices that will eventually force the government to raise grain imports and subsidies.
“There is also a lot of heavy dependency, even in countries that are flush with hydrocarbon resources that we assume because of that would be in a better position to weather the storm, like Algeria or Libya,” Marks said.
Given bread’s role as a politically-charged commodity in this part of the world, further strain on wheat supply and escalating prices could even spark revolt.
“Bread has been a key cause and symbol of popular uprisings in Egypt and Tunisia going back to the 1970s and 80s. The Egyptian revolution in 2011 was preceded by a major drought in Eurasia and a corresponding rise in bread prices,” Akkoyunlu said.