A Humanitarian Crisis Of Unprecedented Scale Is Coming This Fall.

Can the War in Ukraine get much worse? The results of fighting (both on soldiers and civilians) have been hellish, as we’ve all seen. That’s tragic, but that’s war.

The Ukrainian economy has been destroyed in large part, the Russian economy is suffering and even the U.S. economy recorded a loss in GDP in the first quarter of 2022, partly as a result of increased costs and scrambled supply chains resulting from the war. That much is clear. But can it get worse?

Unfortunately, yes.

Most analysts are aware that Ukraine and Russia together provide about 25% of all the grain exports in the world including wheat, barley, and corn. That’s a huge percentage. But, when viewed from the perspective of importing nations in Africa and the Middle East, the two warring parties provide between 70% and 100% of the grain imported by those countries.

Among the largest importers are Egypt, Lebanon, Sudan, Kenya, Somalia, Jordan, and many others. Together, those large importers have a combined population of 700 million people or about 10% of the global population.

There is no ready substitute for those imports. The U.S., Canada, and Australia are all major grain producers, but they already consume their grain domestically (mostly as animal feed to supply beef and pork) or have existing export markets that also rely on the grain.

This looming grain shortage is amplified by global fertilizer shortages, which also come from Russia to a great extent. Many farmers cannot get fertilizer at all, and those who can are paying between twice and three times last year’s price. That will result in further grain shortages and sky-high food prices as the higher fertilizer costs (and transportation costs due to higher diesel prices) feed through the supply chain.

The end state of these various forces, as reported here, is a potential humanitarian crisis of unprecedented proportions late this year and early next year. It’s not a stretch to estimate that the total number who die of starvation as a result of this food shortage will be greater than the total number of people killed on the battlefields of Ukraine.

So, yes, the war can get worse. And it will.

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