WHEAT WARS AND THE POSSIBILITY OF AN "ARAB SUMMER"

by Daniel Barge

The global system is predicated on a number of important factors: relatively free and open trade, production keeping comfortably ahead of demand, and constantly rising living standards among others. In a nutshell, ease and plenty. However, the war in the Ukraine and the geopolitics behind it are now creating new challenges, as this map, created by the French Ministry of Defence shows.

The countries in light brown are the main wheat exporters. Russia is number one, France 4th, and Ukraine 5th. The USA and Canada presumably make up the other 2 of the top five.

The countries in dark brown are the major importing countries, with the percentage of their wheat from Russia and the Ukraine indicated if it is above 20% of their total imports.

Numbers in Black are for Ukrainian wheat imports, green for Russian. Thus we can see that 92% of Georgia's wheat comes from Russia, while 70% of Egypt's wheat comes from both countries combined. 

At present it is mainly the Ukraine's production that has been impacted by the war, but both countries' main wheat export route, namely through the Black Sea, will suffer. This is likely to drive up prices and benefit other exporters like France, Canada, and America that are not impacted by the war.

But the most significant point is that several volatile -- and perhaps "overpopulated" -- Middle Eastern countries will see massive dislocation of wheat supplies, followed by cycles of hoarding, as speculators and profiteers take a hand, causing prices to shoot up astronomically.

What this will do to political stability in the region can only be guessed at. 

If the Lehman-Shock-fuelled price rises of 2011 led to the so-called "Arab Spring" of revolutions and wars, then 2022 might see an "Arab Summer" of even greater chaos. We shall see.