Executive summary
Over the last three months, Russia’s invasion of Ukraine has shocked agricultural markets, bringing the problems of high food inflation and rising global hunger starkly into relief. Prior to the war, levels of hunger had already surpassed all previous records in 2021, with close to 193 million people acutely food insecure and in need of urgent assistance across 53 countries and territories. Against the backdrop of Covid-19, the conflict and countries’ responses to it are now pushing global food prices even higher, along with the risk of growing poverty, hunger, and malnutrition. These developments could trigger what UN Secretary General Antonio Guterres has called a “hurricane of hunger,” with the extent and severity of the storm significantly dependent on developments in the Ukraine conflict.
Over the next three months, Eurasia Group believes the war will degenerate into a prolonged stalemate (a 70% probability). Alternatively, diplomatic efforts could yield a climbdown (a 5% probability), or there may be an escalation of the conflict into a scorched earth campaign (a 25% probability). Both the basecase of stalemate and the escalation scenario would entail serious damage to Ukrainian infrastructure and agricultural production as well as a blockage of Ukrainian exports through the Black Sea until late 2022 or beyond.
On the basis of these scenarios, Gro Intelligence has estimated the income-implied number of people globally who are food insecure, at risk of extreme poverty, and hanging on the edge of famine, according to World Bank and World Food Programme (WFP) definitions. When paired with Eurasia Group’s scenario probabilities, the analysis suggests there is a 95% chance that the number of people facing food insecurity will rise by about 142 million-243 million by November, from roughly 1.6 billion in mid-May.
The number of people living in extreme poverty—on less than $2.29 per day—could increase by 103 million-201 million from just under 1.1 billion at present. Lastly, the number of people on the brink of famine, or those who face the greatest degree of deprivation, could increase by 3.5 million-6.9 million, from about 49 million. Even in the most optimistic scenario of a near-term cease-fire in Ukraine, Gro Intelligence would expect those at risk to decline only modestly over the next five months.
The war is already affecting food commodities in a number of ways, and this report highlights several key channels of transmission. The first channel is through reduced exports from the Black Sea region. Russia and Ukraine combined produce 14% of global wheat supplies and 29% of all wheat e
