Kerch Strait warning, a call for vigilance

In March 2022, the FAO's global food price index reached its highest point ever, triggered by Russia's full-scale invasion of Ukraine. Four years on, concerns about a global food crisis have resurfaced as attacks on ports, grain terminals and cargo vessels in the Black Sea, Kerch Strait and Sea of Azov have intensified. From an agricultural trade standpoint, the heightened tensions in this region may pose a greater risk than the conflict in West Asia.

While the world has adapted to supply disruptions from the blockade of the Strait of Hormuz, the situation in Ukraine has taken a dramatic turn, with the effective suspension of operations at the Greater Odesa port complex, which handles roughly 90% of Ukraine's agricultural exports. Over 80% of Russia's grain exports travel through ports on the Sea of Azov and the Black Sea, both of which have recently become targets of Ukrainian strikes.

This disruption in export trade could potentially trigger a global food supply crisis akin to the one witnessed in 2022. Together, Russia and Ukraine contribute over a quarter of the world's wheat exports, accounting for roughly 15% of corn and barley and more than 60% of sunflower oil exports. Historical supply shocks demonstrate how these disruptions can cascade from one commodity to another; for instance, reduced sunflower oil availability can lead to increased prices for soyabean and palm oil.

Furthermore, the interactions between different "systems" — including ongoing conflicts (such as Russia-Ukraine and US-Iran) and weather events (like El Niño and European heatwaves) — could exacerbate the situation. Policymakers must remain vigilant, as the potential for a perfect storm from these interactions should not be underestimated.

The Indian government, for example, has largely shielded domestic consumers and farmers from the shortages in transport fuels, LPG, LNG and urea caused by the West Asia conflict. However, a similar level of supply-side management may be necessary if the Kerch Strait becomes a major concern comparable to the Strait of Hormuz.