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Together, Russia and Ukraine ship a disproportionate share of the world’s barley, corn, wheat, vegetable oils. Russia also is a key supplier of nickel, pig iron, and fossil fuels.
Those exports have now slowed to a trickle and, in some cases, ceased entirely.
Ukraine has cut exports of cattle, oats, sunflower oil, and wheat to guard supplies for its own people. Russia has halted sales abroad of fertilizer, grains, and sugar. Turkey is no longer exporting beef, butter, goats, lamb, maize, or vegetable oils.
Indonesia has all but stopped selling palm oil. (See related story in this issue.)
Russia’s war in Ukraine has turned nations inward, raising new barriers to international trade in efforts to ensure adequate supplies for their own populations.
The new moves have sharpened prices for grains, meats, oils, and other foodstuffs, many of which were at record prices before the war began.
Since this year began, countries have imposed 47 restrictions on exports of foods and fertilizer, 43 of which have appeared since the Ukraine war began 24 February, according to trade economist Simon Evenett at the University of St. Gallen.
More protectionist measures are likely to appear in coming months, he told The New York Times; Ukraine is likely to lose its summer growing season and grocery stores in Britain, Greece, and Spain already are capping the amounts of cereals and oils customers can buy.
The pinch is especially painful in the Middle East and sub-Saharan Africa, which are acutely dependent on imported food.
Buying food takes about 40 percent of household incomes in southern Africa, where 85 percent of wheat is imported, according to the International Monetary Fund.
Those pressures are unlikely to ease soon.
The Ukraine war has reconfigured trade patterns in ways likely to keep prices high and rising through 2024, the World Bank wrote in a 26 April report.
TREND FORECAST: Cutting or halting exports is a key step in creating Self-Sufficient Economies, a key Top 2022 Trend.
Both the COVID War, when supply chains were disrupted, and the Ukraine War, which stopped the flow of many essential commodities and sanctions that made a bad problem worse… has shot holes in the decades-old movement toward globalization.
Instead of looking for the lowest price, companies and entire nations will develop their internal resources to the extent possible.
For needs not able to be filled internally, companies and countries will form trade alliances in or with countries that are trusted allies instead of trusting to luck with untested nations.
The Trend is Your Friend
Indonesia, the world’s chief exporter of palm oil, has banned all exports of the commodity to ensure domestic supplies as world demand and prices for cooking oil skyrocket.
Palm oil is an ingredient in soaps, cosmetics, and foods ranging from baked goods to ice cream.
Indonesia was in the midst of a domestic palm oil shortage before the war in Ukraine curtailed global supplies of other edible oils. Students in Jakarta and other cities took to the streets to protest the lack.
Palm oil’s price now will rise for heavy importers, including China, India, and the U.S., the Financial Times reported.
The UN Food and Agricultural Organization’s vegetable oil price index has rocketed up 40 percent so far this year.
Supermarket chains in Europe and the U.K. have begun limiting the amount of cooking oil that customers can buy.