For Ukraine, its global export share of maize amounts to 13.1 percent while its shares of barley and wheat are 11.8 and 8.3 percent, respectively. Taken together, the world export shares of Russia and Ukraine account for almost 30 percent of barley, 27.6 percent of wheat, 23.3 percent of rye, and 15.3 percent of maize. A prolonged conflict between Russia and Ukraine will curb the production and export of cereal products from these countries and, thus, elevate their international prices. Disruptions in the supply of cereals—and, more broadly, food—also have the potential of causing domestic unrest in several countries that are already experiencing food shortages because of climatic shocks and supply chain problems. TABLE 1.1: Global Shares of the Russian Federation and Ukraine in Food Staples, 2020/21 (%)
Staple
Russia
Ukraine
Total
Russia
Share of world production
Ukraine
Total
Share of world exports
Wheat
11
3.28
14.28
19.3
8.32
27.62
Barley
12.89
4.97
17.86
17.6
11.77
29.37
Rye
16.62
3.21
19.83
19.35
3.96
23.31
Maize
1.23
2.7
3.93
2.19
13.13
15.32
Cereals
5.89
8.99
14.88
11.76
10.68
22.44
Sunflower seeds
-
-
-
19.04
6.56
25.6
Sunflower seed oil
-
-
-
28.88
46.91
75.79
Sources: U.S. Department of Agriculture; Food and Agriculture Organization.
Russia is also a top producer of NPK fertilizer and urea fertilizer.26 Russia is the fourth largest producer of both nitrogen fertilizer and phosphate fertilizer in the world. As an important input in the manufacturing of fertilizers, soaring natural gas prices are feeding into higher fertilizer prices—along with disruptions in their production. Yara International, the world’s second largest fertilizer company based in Norway, recently announced that it will cut in half its production of ammonia and urea fertilizers in Europe due to the lack of availability of raw materials and, hence, high prices. World fertilizer exports are sharply compressing at a time when major crops are undergoing their planting seasons across the globe. A protracted disruption to the global supply of fertilizers could reduce crop production across several countries in the world if farmers curtail their use of fertilizer because of the high prices. These impacts on the supply and use of fertilizers could have adverse consequences on the 2021/22 and 2022/23 production years.27 Russia and Ukraine are important producers and exporters of metals and mineral ores— including basic metals, semiprecious and precious metals, noble gases, and rare earth metals. Transition metals and rare earth metals are critical inputs for manufacturing high-tech products such as semiconductors and lithium-ion batteries. In turn, these products are key parts of automobiles, electronic vehicles, airplanes, computers, household electronics, and defense products, among others. For instance, Russia accounted for significant global shares of exports of palladium (20.7 percent), platinum (12.3 percent), aluminum (8.9 percent), gold (4.4 percent), and to a lesser extent, iron ore (1.4 percent) and nickel (0.4 percent) in 2020.28 Palladium is a key input for semiconductors while nickel is used in manufacturing electronic batteries. Russia also 26 NPK stands for the macro-nutrients used by plants, which are nitrogen, phosphorus, and potassium. 27 Oxford Economics (2022). 28 Russia accounted for 42.9 percent of the worldwide production of nickel in 2020.
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