With the war in Eastern Europe, over half a billion people, from Morocco to Iran, risk seeing doubled or tripled the cost of bread. The ongoing war between Russia and Ukraine risks having a profound impact not only in Europe, but also on the food security of the countries of the Greater Middle East, with potentially dramatic political, social and economic implications.

Over half a billion people, from Morocco to Iran, risk seeing doubled or tripled the cost of bread – a commodity that has caused riots in Arab countries even in recent times – for a very simple reason: global cereal prices. they could increase by as much as 80-100 percent compared to pre-Covid levels. The prices of soft wheat in the last few hours have reached 311 euros per ton, up by more than 40 euros compared to last month, an increase of about 12 percent. The markets started absorbing the crisis risk early.

The problem is that we start from an already very high base: the coronavirus pandemic had already increased prices by about 50 percent. According to industry experts there are at least four crucial factors: the first is linked to a sudden rise in grain prices in the immediate future, due to the closure of the “tap” of the Black Sea; he second crucial factor, in the medium to long term, concerns the harvest in Ukraine (fifth world producer of cereals) of 2021, which risks being low or zero given that most of the cultures are concentrated in the east, where there is fighting ; the third concerns fertilizers and minerals for fertilizers, two commodities of which Russia is the world’s leading exporter; the fourth relates to the progressive devaluation of local currencies, a phenomenon for which countries such as Tunisia and Lebanon risk suffering an even more devastating impact.

In short, it seems like a perfect storm: on the one hand the scarcity of the good, on the other the devaluation of the currency. In recent weeks, media attention has focused above all on the effects from an energy point of view. But pay attention to food safety: it can be a very dangerous detonator. There is the precedent of the Arab Spring (the increase in the prices of American cereals was one of the contributing causes, ed), but the bread riots have always been at the root of the turmoil in Africa and the Middle East.

Some countries seem more exposed than all others to the Russian-Ukrainian crisis: Egypt and Tunisia. The Country of the Pyramids is one of the main importers of cereal in the world, but it is also a hub for supplies to other countries. Egypt would have grain stocks for 3/5 months. Tunisia is also in danger of being particularly affected. According to the Tunisian newspaper “La Presse”, the Tunis government has calculated for the 2022 budget a price per barrel of 75 dollars, an excessively optimistic figure given the recent developments that have made the price jump above 100 dollars a barrel.

This will entail for the country an increase in the costs of imports of wheat and – consequently – in the expenditure of the State to maintain subsidies, moreover at a time when negotiations are underway with the International Monetary Fund (IMF) for a loan that avoid the default of the land of jasmine.

Source: South Front