Russia’s invasion of Ukraine and the ensuing war will affect economies around the world, with a particular impact on food prices. Russia and Ukraine are major grain producers and, combined, export 25% of the world’s wheat. The war blocks ports through which Ukraine exports its wheat, and sanctions worldwide embargo Russian commodities. The processes that establish food prices on the global markets, as David Frum reports in The Atlantic, raise costs for everyone. This needn’t be a catastrophe. With careful management, policymakers can mitigate the impact of higher food prices.
The war between Russia and Ukraine will profoundly impact the world’s economy.
Russia and Ukraine are major grain producers and exporters. Russia grows 10% of the world’s wheat and Ukraine 4%; together they generate a quarter of the world’s wheat exports. Both countries also export corn and barley in significant quantities.
The war in Ukraine will affect food prices worldwide – including having an impact on countries with stable, secure food access, such as the United States. Global markets create the prices for commodities such as wheat, so the cost will be the same for everyone.
Unlike in the 1960s and 1970s, today’s world food supply is abundant.
In the late 1960s, writers predicted famine and large-scale starvation in countries such as India. The famine didn’t materialize. In 2021, India produced close to 110 million metric tons of wheat; in 2022, it will be the world’s second-largest wheat grower. India is likely to export...