Call for exempting food trade from Russia sanctions as Dhaka hosts Asia-Pacific food conference

Beginning Tuesday, Bangladesh is playing host to a four-day Asia-Pacific regional food conference amidst a growing worldwide concern over commodity price escalation on the backdrop of a war breaking out in Russia-Ukraine region, a critical global food basket.

Just ahead of the 36th Session of the FAO Regional Conference for Asia and the Pacific, the United Nation’s specialized agency the Food and Agriculture Organization (FAO) has called for exempting wheat trade out of sanctions on Russia.

“Large imports of Russian wheat should be exempted from the effects of current sanctions and not targeted in future ones. That will go a long way toward keeping the global food trade moving. All countries should refrain from export bans as well as reduce tariffs and taxes,” said FAO Chief Economist Maximo Torero.

He cautioned, “If Russian banks are banned from using the international payment system SWIFT, as part of sanctions already agreed upon by Western allies, then buyers, traders and other supply chain actors and financial institutions would be blocked from transactions to import food from Russia.”

Russia provides 20% of the world’s wheat, making it the world’s largest wheat exporter. Ukraine is the fifth largest. The war between these two farming giants is poised to disrupt a quarter of the global grain trade, slashing supply.

Ahead of Monday’s Dhaka conference, both FAO and Bangladesh’s Ministry of Agriculture held separate media calls on Monday.

Responding a query from Dhaka Tribune, FAO Senior Economist Aziz Elbehri said, Bangladesh has already reduced its dependence on Russian wheat import by shifting, to some extent, towards Indian wheat and can do consider diversify further its future import sources. He cited one source – Australia, where wheat production has witnessed further growth in recent time.

In 2019-20 fiscal, two-third of Bangladesh’s over six million tons of imports came from Russia and Ukraine and in the next fiscal (2020-21), Bangladesh’s initiation of higher imports from India somewhat reduced its dependence on Russian and Ukrainian wheat. But still these two countries together provided half of Bangladesh’s wheat needs in the last fiscal.

Infograph Dhaka Tribune

Following first two days of senior officials-level talks, the last two days of the four-day (March 8-11) Dhaka conference will see agriculture ministers, FAO director general and other officials having sessions on different aspects of the future food security of the Asia-Pacific region.

Global food basket in trouble 

The war that broke out following a Russian invasion of Ukraine has already taken a huge toll – loss of lives and properties, forcing hundreds of thousands of Ukraine residents to take refuge in other countries. On top of it, if this war prolongs, it would have a serious ramification on global food security as these two warring countries’ account for about 12% of total calories traded in the world. Russia and Ukraine are among the top five global exporters for many important cereals and oilseeds, including wheat, barley, sunflowers and maize.

Russia and Ukraine together command over a third of the global wheat trade (34.1% to be precise), and over a fourth of global barley trade (26.8%). Together these nations almost meet three-fourth (73%) of the world’s sunflower oil demand and supply nearly a fifth (17%) of maize traded in the world today.

Nearly half of Bangladesh’s annual wheat imports come from Russia and Ukraine. Besides, Bangladesh also depends on the region for its other important agro-product and inputs like, fertilizer, oil, pulses etc.

In a recent blog, two senior research fellows of the Washington-based food policy thinktank – IFPRI, Joseph Glauber and David Laborde, have said, “Many importing countries depend even more on these products (cereal and oilseeds) from Ukraine and Russia. North Africa and the Middle East import over 50% of their cereal needs and a large share of wheat and barley from Ukraine and Russia. Ukraine is an important supplier of maize for the European Union and China, as well as several North African markets including Egypt and Libya.”

The International Food Policy Research Institute (IFPRI) fellows warned Russia’s invasion of Ukraine could push up already-high food price inflation, and have serious consequences for low-income net-food importing countries, many of which have seen an increase in malnourishment rates over the past few years in the face of pandemic disruptions.