Ukraine exports cereals, sunflower and other seed oils, soya beans, soybean oil and cake, honey, dried shelled vegetables (pulses/legumes – peas, chickpeas, and mung beans, for example) among other things.
Russia exports a range of foodstuffs, including cereals (wheat, barley and corn), sunflower oil and poultry meat. We are likely to see disruption of imports and exports across a wide range of foods. Anything trading to or from Russia, Ukraine or Belarus is likely to be disrupted.
For the purposes of this we have only considered the impact on key agricultural materials.
Ukraine and Russia have been responsible for more than 25% of global wheat exports.
Short-term: reasonable supply, Ukraine had exported about 80% of milling wheat but only 45% of feed wheat ahead of the conflict. Feed wheat supplies will tighten. Coming up to the northern hemisphere, harvest-restricted milling wheat availability may be seen.
Longer-term: potential serious shortages of all cereals, while Ukraine mainly plants winter wheat so crops are in the ground; whether or not this gets harvested is another issue.
To increase protein levels of lower quality wheats to achieve the protein spec for milling wheats, we may see adulteration with high protein flour (legume or lupins, for instance) and potential, unexpected allergens. As demand begins to outstrip supply, lower quality grains will be entering the human food chain – watch for mycotoxins.
Ukraine accounts for 17% of the globally exported corn. Peak export season for Ukraine is March to May. Ukraine and the US are the only suppliers at present. Planting usually occurs in early May. It is a fertilizer-hungry crop, so even if it gets planted without the fertilizer supply the yield will be severely reduced. Most farmers are reporting they have sufficient inputs for this crop except for diesel.
Short-term: shortages. Medium-term, supply may get worse if the South American crop is smaller than expected.
Longer-term: it really depends on the war. If farmers are unable to fertilizer or harvest, then the impact could be significant.
As demand begins to outstrip supply lower quality grains will be entering the human food chain – watch for mycotoxins.
Ukraine and Russia are among the top 5 producers for pulses and other legumes with Ukraine producing 4-5% of global peas and Russia the 6th largest exporter of chickpeas. They also produce lupins and mung beans.
While dried pulses are unlikely to present an issue, processed, powdered material could be at increased risk of adulteration. Watch for species and unexpected allergens.
Ukraine and Russia are responsible for more than 80% of global sunflower oil exports. EU supply may run out by April. There is not an alternative supplier so there will be a move towards alternative vegetable oils.
Plantings usually take place in April and May, much of the land under agricultural cultivation is in the East, under attack from the Russians. This suggests plantings currently are increasingly unlikely.
Short-term: increased pressure on alternative vegetable oil sources.
Longer-term: it really depends on the war. At this stage it is looking like next season will be impacted too.
Potential adulteration of Sunflower and other vegetable oils as demand outstrips supply.
Ukraine is the number one producer of honey in Europe, with more than half of their production exported. There had been a move to use more Ukrainian honey from countries concerned about the authenticity of Chinese honey. Supply issues with honey will increase prices and pressure to source from alternative origins.
Short term: increased supply from other origins pressuring supply and demand, driving up prices increasing the risk of adulteration
Longer-term: watch for contaminants in any Ukraine honey that may result from conflict chemicals, such as heavy metals or biological contaminants.
Authenticity and contamination risk increase.
Russia accounts for more than 40% of global whitefish production. It is the primary producer of Alaskan pollock and produces over 30% of the global Atlantic cod and 25% haddock. Much is traditionally exported to China for processing. The UK is reliant on imported whitefish directly supplied from Russia but much of the Chinese imports of whitefish are also likely to be Russian. Norwegian, Polish, and German whitefish imports may also have originated to some extent, from Russia.
It is possible the Russian white fish will be routed to China for processing and then look to enter restricted markets through this route. That said, recent COVID restriction affecting some of the seafood processing hubs has restricted processing capacity in China and ongoing logistical issues continue to disrupt the supply chain.
Short-term: price increases of 20-30% and reduced supply.
Longer-term: we may see China processing more Russian fish which may then be routed into restricted markets having 'lost' its Russian origin.
Substitution and incorrect origin labelling/traceability
Energy costs had already had a significant impact on fertilizer production in the UK and Europe as gas prices made fertilizer production cost prohibitive. Russia is the key supplier of natural gas – a key input required for nitrogen fertilizer production. Russia is the world’s largest exporter of urea and accounts for 15% of the US nitrogen imports.
Russia is the second largest potash producer (Belarus is third). Alternatives to this will take years to get on stream leaving a significant gap.
Fertilizer prices have dramatically increased, it is likely farmers will look to apply less which could reduce crop yields across all crops for the coming harvest – further pressuring prices at a time global supply has already absorbed a significant supply hit.
Restricted availability, reduced yields and potentially fertilizer adulteration
Alison Johnson is managing director of Food Forensics