Arab world’s wheat crisis should prompt change

As the old Arab proverb goes, “Life without bread is not life.” So central is bread to Arab alimentation that, in some countries, it is known as “aish” — literally life. It is little surprise, therefore, that Arab countries are some of the largest importers of wheat in the world, with the 13,000 tons delivered to Egypt’s ports topping the list. For this reason, nowhere else in the world has felt the effects of recent geopolitical events so acutely.
Across the Middle East and North Africa, where many countries rely heavily on imported wheat and barley, people are struggling with soaring prices as a result of the war in Ukraine. With food security already under strain owing to climate change, water stress and the pandemic, Arab countries are now experiencing even worse economic circumstances than those that led to the uprisings of 2011.
Where urbanization, climate change and a shift to farming cash crops have limited local production of staples in the Arab world, imports have grown exponentially owing to population growth. Russia and Ukraine, both top exporters of cereals, send roughly half the wheat they produce to MENA countries. Lebanon, Egypt, Libya, the UAE and Tunisia import the most, though many others, rich and poor alike, are incredibly reliant upon these deliveries. The warring nations also produce 80 percent of the world’s sunflower oil, of which Egypt, Iraq, Lebanon and the UAE are top importers. It is estimated 25 percent of Russia and Ukraine’s combined wheat exports and 50 percent of their corn exports expected for 2021-22 are delayed. In circumstances where wheat prices have already risen by 80 percent since 2020, the war is particularly worrying for Arab governments.
David Malpass, the head of the World Bank, last week warned that record rises in food prices would push hundreds of millions of people into a “human catastrophe” if the war in Ukraine were to continue. The World Bank has already estimated that the war would lead to a 37 percent spike in prices, but few have visibility of what effect upon supply chains a prolonged conflict would have. The most at risk of such shocks are the poor, which is particularly challenging in post-revolutionary states in the Arab world that have already experienced turmoil.
In Syria and Yemen, long-standing conflicts have already priced basic foods out of the budget of swathes of the population. Food prices in Lebanon have risen by more than 1,000 percent over the past three years amid political chaos and instability. In Tunisia, where the government is seeking yet another International Monetary Fund bailout, shortages have led to empty supermarket shelves, panic buying and profiteering among those seeking to exacerbate the country’s cost of living crisis.

In circumstances where wheat prices have already risen by 80 percent since 2020, the Ukraine war is particularly worrying for Arab governments.

Zaid M. Belbagi

In Egypt, where the government provides 71 million inhabitants with subsidized bread to the tune of 270 million loaves per day, the Ministry of Agriculture has announced that the country has stockpiles of most essential foods to meet consumption for at least the next six to nine months. This is off the back of UAE investments of about $2 billion in state-held stakes in companies. Although these moves may temporarily buttress against shocks, they will not contain the inevitable political challenges caused by the current crisis.
The Palestinian Authority this month warned that it could run out of wheat in just three weeks, with British charity Oxfam adding that impoverished Gazans will be the first to experience hunger related to shortages and price hikes.
In Morocco, which is less exposed than many of its neighbors as most of its grain is imported from Canada, spiraling costs have prompted calls for the resignation of the prime minister. Iraq has seen protesters take to the streets after flour suddenly rose in price by nearly a third. In Tunisia, many fear a return to the bread riots of the 1980s as families struggle this Ramadan. Across the Arab world, where successive governments have for more than half a century tried to keep subsidized bread affordable, the current commodities crisis, compounded by existing economic woes brought on by the pandemic, have created a perfect storm for political upheaval.
Wheat producers in South America currently have higher than average surpluses from the last harvest available to export. Overall, however, it will be difficult to increase global wheat supply in the short term. Governments must find other alternative partners in the US, India and Australia or continue to scramble to provide short-term solutions to the crisis.
The most contentious issue will remain bread prices, which governments must not raise if they are to avoid riots. Increased prices will ignite unrest, as they did so spectacularly following the poor Russian wheat harvests in 2010. The current crisis in Ukraine should focus minds in the Arab world to promote alternative eating habits and sustainable local farming, as the region will continue to experience shocks to living standards as its climate warms faster than the global average.

• Zaid M. Belbagi is a political commentator, and an adviser to private clients between London and the GCC.
Twitter: @Moulay_Zaid