We are four weeks into the Iran war and the economic story getting the least attention is the one with the longest consequences. Somewhere in the noise of missile strikes and shipping reroutes, global fertiliser markets have moved in a way that is going to affect what food costs and who controls it for years, with Russia at the centre of this story.
Russia’s Growing Dominance in Wheat Supply
Russia’s wheat supply has increased by 20% in the past year, according to the Food and Agriculture Organization of the United Nations, making it one of the largest wheat exporters in the world. This rise in wheat supply is expected to have a significant impact on the global food market, with many countries relying on Russia for their wheat imports.
The increase in Russia’s wheat supply can be attributed to a combination of factors, including favourable weather conditions, improved farming practices, and government support for the agricultural sector. As a result, Russia is now in a strong position to dictate the global wheat market, with many countries, including South Africa, relying on Russian wheat imports.
Impact on South Africa
The impact of Russia’s growing dominance in wheat supply on South Africa is significant. As one of the largest importers of wheat in Africa, South Africa relies heavily on Russia for its wheat imports. According to the Trade Law Centre, South Africa imported over 1 million tons of wheat from Russia in 2022, making it one of the largest importers of Russian wheat in Africa.
The following are some of the ways in which Russia’s growing dominance in wheat supply is expected to impact South Africa:
- Increase in wheat prices: With Russia in control of the global wheat market, wheat prices are expected to rise, making it more expensive for South African consumers to purchase bread and other wheat-based products.
- Decrease in food security: The reliance on Russian wheat imports makes South Africa vulnerable to fluctuations in the global wheat market, which could lead to food insecurity if Russia decides to reduce its wheat exports.
- Impact on local farmers: The dominance of Russian wheat in the South African market could also have a negative impact on local farmers, who may struggle to compete with the cheaper imports from Russia.
In conclusion, Russia’s growing dominance in wheat supply is a significant development that is expected to have far-reaching consequences for the global food market. As one of the largest importers of Russian wheat, South Africa is likely to be heavily impacted by this development, and it is essential that the government and local farmers take steps to mitigate the effects of this trend.
