Ukraine. Wheat, weapon of war

This is Ukraine’s other war, and it has crept into our lives without our realizing it. It hides in our bakeries. On our morning sandwiches. In our pasta and cookies. This is the wheat war. Behind the bombardments, the tens of thousands of civilian and military victims, the columns of refugees leaving their homes, this conflict is less visible.

It is being played out in destroyed Ukrainian farms, fields riddled with shellfire, burnt silos, bombarded port facilities, immobilized freighters… A war within a war, which destabilizes global food security.

Who knew, before the start of the Russian invasion on February 24, 2022, that Ukraine was a grain superpower in general, and wheat in particular? While corn – the country’s other major production – is mainly intended for livestock, wheat, on the other hand, feeds half of humanity every day. However, the Russian-Ukrainian war is destabilizing world trade, complex and fragile, as sensitive to climatic hazards as to geopolitics.

Last gasp: on August 16, a Ukrainian cargo ship left the port of Odessa via a temporary corridor set up by kyiv on the Black Sea. At the end of July, Russia shelled the port facilities at this strategic point for grain traffic in the region. A few days after the denunciation by Russian President Vladimir Putin of the “Black Sea Grain Initiative”. Behind the diplomatic jargon, a key agreement, signed on July 22, 2022 between Ukraine and Russia – the only one since the start of the conflict -, under the aegis of the UN and Turkey.

This allowed the opening of a maritime humanitarian corridor for agricultural commodities. After six months of paralysis, cargo ships could finally resume this crucial route, the only maritime gateway to the rest of the world. In one year, the agreement made it possible to leave 33 million tons of cereals of the country. Above all, it has helped to calm the mad rise in food prices on the planet since the start of the war.

Ukraine, with black and fertile land, plays a major role in the wheat market. Before the Russian invasion, it had managed to rise in twenty years to the rank of the largest exporters of wheat. Even its flag symbolizes this formidable agricultural destiny: two horizontal bands of blue and yellow, for the azure sky above the golden wheat fields. Before the war swept away everything in its path, the homeland of Volodymyr Zelensky competed with the giants of wheat exports: Russia, therefore, but also Canada, the United States and France, this “club of five” which provides more than three quarters of world exports. Another key figure, which shows the devastating effects of this conflict: 27 countries (and 750 million inhabitants) depend more than 50% on Ukrainian and Russian exports to feed their populations. Among them, Egypt and Indonesia, the Maghreb and the Middle East or the Horn of Africa. What is being tied up in this conflict over wheat is indeed the fate of a part of the planet.

The impact on our bakeries

The concern is less in France for a good reason: largely self-sufficient in wheat, we export half of our production. In the kingdom of the baguette, it is not the shortage that worries but inflation: “In this globalized market, where the price of wheat is set by financial markets located in Chicago (United States), Odessa (Ukraine) or Rouen (France), the conflict has very real repercussions on our 33,000 bakeries”, observes Dominique Anract, a baker by profession, on (temporary) withdrawal from trouble for the time of his mandate as President of the National Confederation of Bakery- French pastry. “Before the establishment of the corridor, the blockade had frozen all exports through the Black Sea.

As a result, between February and July 2022, wheat prices soared, from 200 dollars per ton to more than 450! I’ve never seen that ! he is moved, specifying that the millers then temporized so as not to fully pass on the increase. Flour has “only” increased by 30%. “But at the same time, bakers also faced rising prices for energy, eggs due to bird flu, sugar and yeast (made from sugar, editor’s note) linked to competition from biofuels”, continues Dominique Anract. Already tested by the Covid pandemic, the sector has increased its prices to compensate for the crazy increase in charges: “While it had only taken 23 cents in twenty years, the baguette has increased by 5 to 10% like all other baked goods. It was that or close up shop. »

If the French have a bad wallet, in other countries, the tensions over this nourishing cereal affect the very survival of the inhabitants. Because the wheat market has become internationalized. 25% of production is traded on world markets. “Everything is interconnected. Since the start of the conflict, we have seen very high price volatility, with violent falls and outbreaks, ”explains Philippe Heusèle, cereal farmer near Meaux (Seine-et-Marne). Question from a neophyte: when a ton of wheat cost 450 dollars, double the usual price, did the French grain farmers make a fortune? “It all depends on when farmers have sold their goods and bought their inputs for the next harvest, that is to say fertilizer and energy, replies Philippe Heusèle. Some have had very favorable or very unfavorable situations. For farmers, the hardest part now lies in risk management. To each his own parade: “Personally, I delegate the construction of prices to my cooperative, which itself operates as a union of cooperatives to manage the risks. Other farmers are in the day and take on this responsibility. »

Philippe Heusèle also manages the international relations of Intercéreales: “This interprofession brings together all the players in supply, from production to storage, including port infrastructure and milling”, explains the passionate and fascinating producer of wheat and linen. Either the tricolor link of a much larger chain, sensitive to the slightest disturbance. “The global wheat trade needs fluidity to function well. A bit like blood in the human body, as soon as an artery gets blocked, it creates an embolism,” explains the grower. Result: “Any blockage, or threat of blockage, results immediately in a surge in prices, but also, very concretely, in shortages, in the weeks or months that follow, in all the importing countries. »

A new global balance

Hence the words of Emmanuel Macron at the end of July, who accused Vladimir Putin of making “food a weapon”. Same analysis by UN Secretary General António Guterres, saying that “hundreds of millions of people are facing hunger” and that they would “pay the price”. The Russian president, for his part, presents a completely different reading of the tensions: “The West has used the grain agreement for the purpose of political blackmail and has made it a tool for the enrichment of multinationals, speculators on the world market . “Behind the declarations of war and the negotiations, it is also a new global balance that is taking shape: on the one hand, the Western bloc (United States, European Union, United Kingdom), on the other the BRICS group (Brazil, Russia, India, China and South Africa). In this race for influence, Russia does not hesitate to play the wheat card. “All the importing countries note that Russia no longer follows the rules of international trade but uses wheat for diplomacy”, reports Philippe Heusèle. At the end of July, Vladimir Putin thus promised to deliver free tons of cereals to six African countries…

By closing the grain corridor, the head of the Kremlin, bogged down in an endless conflict, is also seeking to asphyxiate the Ukrainian economy. “However, the situation is much less serious than last year, estimates Gautier Le Molgat, CEO of Argus Media France (Agritel), a company specializing in agricultural strategy. First of all, market players had more or less anticipated the news. And now there are alternatives to the sea route – the cheapest and the fastest. From the start of the war, solidarity lanes (“solidarity corridors”) were set up by the European Union, which enabled 41 million tonnes of Ukrainian cereals to be transported by road, rail and river. Transiting through Eastern Europe (Romania, Bulgaria, etc.), the cereals were transported to European export ports, then to the rest of the world.

Far from the crazy increases of February 2022, the ton of wheat thus increased “only” by 8% at the end of July, specifies Gautier Le Molgat, who knows all the better behind the scenes of the conflict as his company has a branch in Kiev. “Ukrainian producers are heroic. Despite the war, they fight every day to try to export. They are getting there despite the Russian offensives to prevent them,” he says. Still, the 2022 harvest fell by a third compared to 2021. “Russia having had a good wheat harvest this year, Vladimir Putin did not fail to recall that his country could supply the world market”, adds the specialist.

Moscow’s demands

To reopen the transit route, the head of the Kremlin demands the lifting of Western sanctions that have stifled his exports since the start of the war, in particular the return of Russian banks to the international banking system. “This measure has singularly complicated the wheat business and Russian farmers are also the big losers in this conflict,” judge Gautier Le Molgat. Will grain cargo ships again be able to travel via the Black Sea? The next few weeks are going to be crucial. But while diplomats are busy, two other threats hang over wheat: heat waves in India – which this year reserved its rice production for the domestic market – and the return of El Niño, a climatic phenomenon threatening to many harvests.

At the end of the summer, the only certainty: wheat has returned to the heart of our concerns. “Cultivated for millennia, it is at the origin of agricultural development, recalls the researcher Sébastien Abis, in his fascinating book Geopolitics of wheat, a vital product for global security (Ed. Armand Colin, February 2023). Thanks to him, the basic diet of populations has been built up over time. When it runs out, there is restlessness and fear. To meditate while going to buy his wand.