Russia’s invasion of Ukraine may cause long-term grain prices to rise more than 7%, according to a study on Monday showing how expanded production elsewhere to compensate would lead to higher greenhouse gas emissions.
Russia and Ukraine are global breadbaskets, together exporting about 28% of the world’s wheat supply. Russia’s blockade of Black Sea ports and sanctions on Moscow have caused short-term price surges and triggered fears of an acute hunger crisis.
Researchers in the United States and Uruguay modeled the likely impact of the conflict on wheat and maize prices over the coming 12 months, looking at a variety of scenarios.
One model found that if Russian grain exports were halved and Ukrainian exports significantly reduced during that time, maize would be 4.6% more expensive and wheat 7.2% more expensive – even assuming that other exporters could step in and fill the shortfall.
They said the price increase would persist as long as exports remained restricted. To close the supply gap, the study found that other major producers would need to expand their grain growing areas significantly.
Were all grain exports from Ukraine to cease, Australia would need to expand its wheat area by 1%, China by 1.5%, the European Union by 1.9% and India by 1.2%, according to the model.
This land use change would lead to just over a billion tonnes of additional carbon dioxide equivalent added to the atmosphere, according to the study published in Nature Food.
"The cropland expansion resulting from the war in Ukraine is occurring at the expense of more carbon emissions," said lead author Jerome Dumortier, a researcher at the O’Neill School of Public and Environmental Affairs in Indianapolis, U.S.
United Nations chief Antonio Guterres warned in July that Russia’s invasion of Ukraine had combined with the lingering trade impacts of COVID-19 to create an "unprecedented global hunger crisis."
Figures from the U.N.’s Food and Agriculture Organization (FAO) show food prices are currently more than 10% higher than they were a year ago.
Although Moscow and Kyiv reached an agreement in July to unblock Ukrainian seaports and to resume some grain exports, there are fears that the conflict could lead to years of elevated food prices.
A total of 165 ships with 3.7 million metric tons of agricultural products on board have left Ukraine under the deal brokered by the U.N. and Türkiye, the Ukrainian infrastructure ministry said on Sunday.
Ukraine shipped up to 6 million metric tons of grain per month before the war. Three Black Sea ports were reopened under the grain deal and the ministry has said these ports are able to load and send abroad 100-150 cargo ships per month.
Dumortier said that it was not currently clear whether other grain producers were able to meet global demand, meaning prices could rise even further than predicted in the models.
"There are drought conditions in South America, Europe and China, and export restrictions from various countries," he told Agence France-Presse (AFP).
"Given those hindrances to full adjustment, commodity prices may be higher than what is estimated in the paper."