Russia-Ukraine War Adds Pressure to Already High Food Prices

According to an index based on five major commodities, including cereal grains, meat, and sugar food prices soared by 28% during 2021. Higher costs for labor, freight, and ingredients are reflecting rising food prices. With prices of all inputs going up so goes the hurdle rate for a profitable season.

Now, Supply chain hurdles are being exacerbated by the current war between Russia and Ukraine. Both countries at war are very important to the world’s food production and security in the world; accounting for 30% of wheat,  20% of corn, and 80% of global sunflower oil exports. Also, Russia and Ukraine produce 30% percent of the world’s Urea, 26% percent of global potash, and a significant amount of phosphate; major ingredients used in the production of fertilizers.

The wheat planting season is now, Ukraine has lost 30% of its soybean farms to fire and Russia has banned the export of Wheat causing a blockage in supply, particularly in Africa.

What Does This Mean for Import Reliant Countries in West Africa?  

According to Boye Olusanya, CEO of flour mills of Nigeria, “Russia and Ukraine are number one and five in wheat production, and if you take that volume, which is almost one-third of global production, there would be an immediate impact on prices.”

For Ghana, the risks to inflation are higher as the Ghana cedi has weakened by about 20% against the dollar this year. Ernest Addison the Governor of the Bank of Ghana said that the conflict in Ukraine will likely fuel further rises in inflation and widen the country's trade deficit. Ghana imports nearly a quarter of its wheat from Russia and around 60% of its iron ore from Ukraine.

With the Russia-Ukraine war impacting global food production and energy supply, we're seeing why it is vital to rapidly spur major local production to reduce dependence on imports.

You Should Worry Except You Are On a Special No-carb Diet

The wheat industry, primarily comprising flour milling companies, is an integral part of the food chain in Sub Saharan Africa, producing flour for low-cost convenient staple and baked foods. 

Wheat is the third most widely consumed grain in Nigeria after maize and rice with an annual consumption of about 6 million metric tons.

The previous administration under the Agricultural Transformation Agenda (ATA) by the Ministry of Agriculture, developed the country’s Wheat Transformation Agenda (WTA). Amongst other initiatives, the WTA adopted a range of policies, aimed at reducing local wheat consumption. These consisted of the inclusion of cassava in bread flour, implementation of a 15% levy on wheat importation as well as agricultural incentives aimed at spurring local wheat farming. Part of the agenda of the WTA was to attain a domestic production of 1.5 million metric tons by 2017 a far cry from the 63,000 tons produced in 2019. 

Nigeria imported 6.5million tonnes of wheat in 2020. 

In 2021, the Central Bank of Nigeria implemented the Brown Revolution Initiative, an intervention program to support wheat farming in Nigeria. by including Wheat on the forex restrictions, they hope to conserve the nation’s foreign reserve and boost local production. 

Time to Consider Changing your Taste Buds 

The growth in wheat demand is caused by urbanization and an increased switch to the consumption of wheat-based foods such as flour, pasta, semolina, noodles, and wheat meal. While rice can be produced in 34 states, Wheat on the other hand can only be produced in 6 states in North-Eastern Nigeria, a region where the rise in insurgency has decimated communities leading farmers to flee the area to protected camps. 

Aside from the direct economic impact of procuring wheat, there is an urgent need to switch to other alternatives where there is comparative advantage in production so that we can ensure people get their stable food needs.  

Nigeria is the world's largest producer of cassava, It is a healthy option, and gluten-free food. Scarcity is coming and now is the time to explore the utilization of cassava for food and industrial use.

High Quality Cassava Flour {HQCF}, tapioca flour, cassava starch, and cassava flour are all processed forms of the root tuber that can replace our dependency on grains.

with speculations of cross-border maize and rice smuggling from Nigeria to neighboring West African countries, stakeholders anticipate exports restriction on grains. Import bans are the cornerstone of the Nigerian government’s agricultural development and food security agenda. Who gains the most during times of tight commodity suppliers and economic sanctions? Those who are agile enough to move food around the globe on short notice and are connected enough to stay off the sanctions radar.