Saudi finance minister warns of growing global food crisis caused by Ukraine war

Several countries are raising the alarm over the growing crisis in global food supplies triggered by Russia’s invasion of Ukraine. The warring states are among the world’s top agricultural exporters and feed much of the developing world in particular.

Saudi Finance Minister Mohammed al-Jadaan believes the world is not taking it seriously enough.

“I think this is a very serious issue. The food crisis is real. I think it is still underestimated by the world community,” al-Jadaan told CNBC’s Hadley Gamble at the World Economic Forum in Davos, Switzerland.

“It is going to cause a lot of issues, not only in the MENA (Middle East and North Africa) region, but even in the wider world.”

“The MENA region is very, very, very vulnerable,” the finance chief added. “It imports a lot of food, it represents 6% of the population in the world.”

Russia’s unprovoked invasion of Ukraine now threatens a huge proportion of the wheat and grain that countries in the Middle East and Africa rely on. Together, Russia and Ukraine account for roughly one-third of the world’s global wheat exports, nearly 20% of its corn and 80% of its sunflower oil — and they provide the majority of the MENA region’s supply.

Wheat futures are up more than 30% since the invasion began in late February.

Before the war, more than 95% of Ukraine’s total grain, wheat and corn exports were shipped out via the Black Sea, and half of those exports went to MENA countries. That vital conduit is now shut, choking off Ukraine’s maritime trade after its ports came under attack from Russia’s military.

That has amplified the rising inflation that’s hitting hundreds of millions of people, particularly those in poor areas and already facing high unemployment and worsening economic prospects.

Saudi Arabia in late March pledged $15 billion in economic assistance for Egypt, the Middle East’s most populous country, as its economy was hit hard by record-high grain prices as a result of the war. Egypt is also seeking help from the International Monetary Fund to support its ailing economy.

Egypt alone — with its burgeoning population of some 100 million people — imports 80% of its wheat from Ukraine and Russia. Lebanon, already years into a crippling debt and inflation crisis, imports 60% of its wheat from the two warring countries, which provide 80% of Tunisia’s grain. Food insecurity in the MENA region has often been associated with political instability, riots and violence.

“So we need to be very careful on what is happening in the region,” al-Jadaan said. “We will provide the support needed as much as we can, but it’s not only us — this is a global problem that we need to work collaboratively with the world to bring about solutions.”

Al-Jadaan cited Saudi Arabia’s previous efforts within the G-20 to work with other member states in addressing the Covid-19 pandemic and recovery, saying that collaboration across governments and regions had helped bring about solutions. “I think the food crisis calls for such collaboration,” he said.

Tags: grain, wheat, Middle East, Black Sea, Africa, futures, Ukraine, MENA, Russia, food crisis, sunflower oil, world, exports, growing crisis, corn, global food supplies