Ukraine war is leading to a global food and energy crisis

The war in Ukraine will make it harder for low- and middle-income countries to recover from the economic impact of COVID-19, the World Bank is warning.

The conflict is taking a huge toll on the people of Ukraine, as well as on the country’s economy. But there are also significant consequences for millions of other people around the world.

Economies with strong trade, financial and migration links to Russia and Ukraine could suffer “the greatest immediate harm”, the World Bank says.

Countries that rely heavily on Russia and Ukraine for food will also feel the impact. These include “a handful of economies” in Europe, the Middle East, Africa and Central Asia that get 75% of their wheat from Russia and Ukraine, the bank says.

The biggest risk is possible disruption to the production or transportation of grains and seeds from Russia and Ukraine.

Alongside higher prices, this could cause “increased hunger and food insecurity” in lower-income countries, the World Bank warns.

This World Bank chart shows Ukraine’s share of global exports for products including foodstuffs, such as seed oil, corn and wheat. For seed oil, it accounts for more than 40% of all exports.

This reflects Ukraine’s status as the world’s biggest exporter of sunflower oil. The biggest markets for sunflower oil include India, China, Turkey and the Netherlands according to the Observatory of Economic Complexity, a data visualization platform.

More than 13% of global corn exports and over 5% of wheat exports also come from Ukraine.

Russia accounts for 18% of the world’s wheat exports and 14% of fertilizers. It’s also a “major force” in the market for energy and metals, the World Bank says.

The country controls a quarter of the world’s natural gas exports, 18% of coal exports, 14% of platinum shipments and 11% of crude oil exports.

Oil prices have more than doubled in the past six months, and if this continues it will cut rates of economic growth by 20-50% in countries such as South Africa, Turkey, China and Indonesia, the World Bank estimates.

There are three main ways to tackle the food crisis, researchers at the International Food Policy Research Institute wrote in an article for the World Economic Forum.

These include other major grain producing countries boosting their exports – for example by releasing stocks. Other major oil producers also need to increase supplies to help lower fuel, fertilizer and shipping costs, they say.

And in the interim, governments need to protect their people by offering food or financial aid.

The impact of Russia’s invasion of Ukraine on global food and energy supplies is also discussed in a podcast for Radio Davos, the Forum’s podcasting platform.

“The difficulty here is Ukraine grows enough food to feed 400 million people on planet Earth,” David Beasley, Executive Director of the United Nations World Food Programme tells the show. “So when the farmers on the battlefields aren’t planting or aren’t harvesting, what impact do you think that’s going to have?”