Ukraine war disrupts cereal markets, threatens food security in SE Asia

Date: 2022.04.11

As war rages across Ukraine, farmers have been busy towing captured Russian tanks, artillery, and downed helicopters. In addition to their new calling, is the planting of the spring crop.

In 2021, Ukraine was the third largest producer of wheat, exporting 60 million of its 80 million-ton harvest. That accounted for 17 percent of global exports. In addition, Ukraine was the second largest producer of barley, the fourth largest producer of corn, and the largest producer of sunflower oil.

Both Ukraine and Russia are major players in global markets. But they have a greater role in the developing world and in humanitarian disasters: Half of the World Food Program’s grain is purchased in the Ukraine. In 2021, Ukraine exported U.S. $2.9 billion in wheat to Africa.

Since the war began the price of wheat, which was already at a historic high, has increased by 30 percent.

Ukraine, along with Russia, is an important provider of grain and food staples to Southeast Asia. In 2020, Ukraine exported $708 million to Indonesia, accounting for 25 percent of imports; $92 million to Malaysia, 23 percent of imports; and $131 million to Thailand, around 17 percent of imports.

But Indonesia and the Philippines – Southeast Asia’s most food insecure nations – will be hit particularly hard. Almost 75 percent of Indonesia’s imports from Ukraine consists of cereals, including wheat. In 2021, Indonesia imported 3.07 million tons of wheat from Ukraine. In 2020, Ukraine was the single largest source of grain for the most populous Southeast Asian nation, and the largest in 2021.

And in both Indonesia and the Philippines, demand for wheat is growing.

According to the Philippine statistics agency, in 2021 imports of cereals increased by nearly 48 percent over 2020. In Indonesia, flour consumption increased by almost 5 percent in 2021.

At the same time, the populations of the neighboring countries are growing.

Indonesia’s population is increasing by 1.1 percent per annum and the Philippines’ at 1.3 percent – making it the fastest growing population in Southeast Asia. In both countries, food production has never kept pace with population growth. And both governments are very sensitive to inflation in food commodities.

Read more here.

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