Price rises sparked by war worsening food crisis in Africa

Ukraine, Russia are major suppliers of wheat, fertilizers

Aid agencies hit by rising costs and drop in donor funding

By Nelson Banya

HARARE, May 10 (Reuters) – Zimbabwean security guard Edwin Dapi was already struggling to provide for his wife and four children before a conflict 11,000 km (6,800 miles) away in Ukraine sent global prices for grains, cooking oils, fuel and fertilizer soaring.

Now his monthly pay of 18,000 Zimbabwe dollars, worth roughly $55 at the black market rate used at many informal markets, is stretched to breaking point.

At a supermarket in Mabvuku, one of the poorest neighbourhoods of the capital Harare, the 46-year-old was fretting over his family’s next meal.

He reached for a 2-litre (0.5 gallon) bottle of vegetable oil, but at 990 Zimbabwean dollars it was more than he could afford. So was a 2 kg (4.4 lb) bag of flour for 390 Zimbabwean dollars.

“I keep hearing it’s because of Ukraine, but I don’t know what that has to do with us,” he said, scratching oil and flour from his grocery list.

United Nations agencies are warning that price hikes sparked by Russia’s invasion of Ukraine will worsen a food crisis in Africa, where tens of millions of people have already been plunged into extreme poverty by the COVID-19 pandemic, armed conflicts, climate shocks and economic turmoil.

Last year, Sub-Saharan Africa accounted for nearly two-thirds of the 193 million people considered to be acutely food insecure worldwide, a report by the Global Network Against Food Crises, set up by the United Nations and the European Union, said this month.

Once-prosperous Zimbabwe has struggled to feed itself since the seizure of thousands of white-owned farms to resettle black families, a policy championed by Zimbabwe’s late president Robert Mugabe during the 2000s.

More recently, its economy has been throttled by drought and cyclones, rolling electricity cuts, foreign currency shortages and runaway inflation.

The U.N. World Food Program (WFP) estimates that some 5.3 million Zimbabweans – around a third of the population – are food insecure.

To make ends meet, Dapi said he was making plans to move his family to his home village of Mutoko, some 140 km (87 miles) northeast of Harare. “I must reduce my rent and school fees because everything is going up, except my salary,” he said.

Across Africa, food insecurity is on the rise. More than 2 million children are at risk of starving to death in the Horn of Africa, where parts of Kenya, Ethiopia and Somalia are facing their driest conditions in more than 40 years, U.N. aid chief Martin Griffiths told donors in Geneva on April 26. Read full story

In Ethiopia, a civil war has pushed hundreds of thousands of people into famine conditions. Millions more are at risk in South Sudan, where a war that ended in 2020 caused widespread destruction, compounded by some of the worst flooding in generations. L3N2NW2JD

West Africa is facing its worst food crisis on record, driven by Islamist insurgencies that have forced millions of people off their land in Burkina Faso, Mali, Niger and Nigeria. The region has also seen worsening floods and droughts linked to global warming. L5N2W23Z3

The conflict in Ukraine is making a dire situation even worse.

The war has disrupted shipping in the Black Sea, a major artery for grains and other commodities, throttling exports from Russia and Ukraine to markets including Africa. Ukraine has said the area sown with grains could fall by around a fifth this year because of the war.

Abebe Haile-Gabriel, assistant director-general of the U.N. Food and Agriculture Organization (FAO) and its representative for Africa, said nearly half of the continent’s 54 countries rely on Russia and Ukraine for wheat imports. Russia is also a major supplier of fertilizer to at least 11 countries.

“This Ukraine war’s impact is overlapping with a crisis that has already been unfolding in some African countries,” Abebe told Reuters. “We have a very grim outlook going forward.”

‘DOUBLE JEOPARDY’

Even before the conflict in Ukraine, food inflation was pushing many African families to the brink. Global food commodity prices climbed over 23% last year, the fastest pace in more than a decade, according to the FAO.

Many of the most vulnerable depend on handouts from the WFP, which buys half the wheat it distributes around the world from Ukraine. Rising food and fuel prices have increased its monthly operating costs by $71 million – a 50% rise – since 2019, said Tomson Phiri, a global spokesman.

“WFP faces a double jeopardy: our costs are going up as the numbers of hungry rise,” he told Reuters.

Prior to the Ukraine war, the WFP faced a funding shortfall that forced it to cut rations in 17 African countries – including Zimbabwe, Chad, South Sudan and Ethiopia – and the gap has widened as donors turn their attention to the conflict in Europe, Phiri said.

Experts say the impact of grains shortages could be particularly harsh in North Africa, where countries like Egypt import up to 80% of their wheat from Russia and Ukraine.

But even African countries that import little from them are being hurt by higher world prices for key commodities.

Kenya, East Africa’s biggest economy, was shielded from early impacts because millers there had turned to other suppliers after Russia increased taxes on its wheat exports last year, said Kennedy Nyaga, chairman of the United Grain Millers Association.

Kenya has sufficient wheat reserves to last until September but has already run out of reserves of maize – its staple – due to the drought, Nyaga said.

The association is pressing the government to allow millers to import 360,000 tons of maize duty free, saying prices leapt from around 2,800 shillings ($24.17) per 90 kg bag to 4,500 shillings since December.

Kenya’s Ministry of Agriculture did not respond to requests for comment. Finance minister Ukur Yatani said on May 5 he was yet to receive a request from the millers for duty free imports.

STRUGGLING FOR BASICS

In Zimbabwe, households are already feeling the pain. About half its 15 million people survive on less than $1.90 per day, according to the Zimbabwe National Statistics Agency.

Households’ struggles to afford food were compounded when the Grain Millers Association of Zimbabwe hiked prices for wheat flour and the staple maize meal by about 15% in March, citing surging global prices linked to the Ukraine war.

The FAO says that Zimbabwe imports the bulk of its wheat from the Black Sea and Baltic regions, with Russia and Ukraine accounting for nearly one-fifth of imports last year.

Information Minister Monica Mutsvangwa said in March the government had purchased sufficient maize and wheat stocks from local farmers in the 2021-21 agricultural year to cushion the poor against any food shortages this year.

But the millers association imposed even bigger price increases in April of 31% for wheat flour and 52% for maize meal.

The group says it is seeking alternative suppliers for at least 155,000 tonnes of imports needed until the next harvest in October.

As fuel prices rose and the currency rapidly devalued, Zimbabwe’s annual inflation jumped to 96% in April, up from 61% in January.

And with fertilizer prices soaring due to the disruption of exports from Russia, many farmers in Zimbabwe are struggling to afford it just as dry weather is affecting crop yields in parts of the country.

Fertilizer prices are up 30% over the past year, according to the Zimbabwe Farmers Union.

“If fertilizer prices remain at their record high levels, it will also dim crop yield prospects for the 2022/23 agricultural year,” WFP’s Zimbabwe spokeswoman Maria Gallar Sanchez said.

Officials at Zimbabwe’s information, agriculture and trade ministries did not respond to requests for comment.

Fertilizer firm Omnia Holdings OMNJ.J, which operates in many African countries, said prices of potash, ammonia, urea and other key soil nutrients have gone up by 200%-400% since January 2021.

Small-scale farmers, who account for more than 70% of fertilizer consumption in the region, have been hardest hit, Omnia Chief Executive Seelan Gobalsamy told Reuters.

Boniface Mutize, who grows maize and soybeans just outside Harare, said he has started making his own fertilizer by mixing cow dung or chicken waste with zinc. But he said he needs ammonium nitrate, which is not produced in large quantities in Zimbabwe.

“Many smallholder farmers will not be able to come back next season to grow their own food,” he said.

($1 = 115.8500 Kenyan shillings)

(Additional reporting by Duncan Miriri and Ayenat Mersie in Nairobi; Editing by Olivia Kumwenda-Mtambo and Daniel Flynn)