Salvatore Capasso, Giovanni Canitano (a cura di)
Mediterranean Economies 2023
DOI: 10.1401/9788815411167/c7
The above-mentioned dilemma of the agriculture and the agrifood systems in the Mediterranean area prompted us to reflect on the increasing interdependence between the countries of this area and the global economy. The COVID-19 outbreak drew attention to the interdependence of socio-economic processes as well as the consequences of uncoordinated domestic
{p. 250}policies. At the same time, the pandemic revealed the critical role of supply chains in the transportation of certain goods, namely medical supplies [Kahkonen et al. 2021] and food products. The importance of supply chains was even more critical in countries with poor, disconnected or deteriorated infrastructure such as those in the area under consideration.
Given the above-mentioned challenges for the Mediterranean region, it is clear that logistics assumes a key position in order to allow trade flows at domestic and international levels.
The Russia-Ukraine war has deeply affected maritime logistics and connectivity, hence global trade, with a substantial impact for agrifood commodities [UNCTAD, 2022b]. Here we should consider a double dynamic. On the one hand, one has to take into account the export of agrifood commodities from Ukraine and Russia to the Mediterranean region. On the other, there is the export of agricultural and agrifood commodities from Mediterranean countries to the rest of the world.
Ukraine and Russia are among the world’s major producers of grains and oilseeds: their export occurs through sea transport, which the war has seriously compromised.
Ukraine and Russia together export nearly 12 per cent of food calories globally [European Parliament 2022]. As shown in table 2, in 2021, Ukraine and Russia exported 56,997 tonnes of wheat and 10,927 tonnes of vegetable oils: they accounted for, respectively, 25.81 per cent and 10.81 per cent of world exports.
In addition to the humanitarian crisis in some of the Mediterranean countries, the impact of the Russia-Ukraine war on agriculture and agrifood systems can be summarized as follows:
– Production: the ongoing conflict is shifting much of the workforce previously employed in agriculture and in agrifood industry to military action or is making them expatriate, with the effect of leaving fields uncultivated and thus jeopardising production even for domestic use. According to FAO estimates [2022a], the total damage in the agricultural sector was about USD 834 million, with a loss of about USD 185 per rural household. The negative impact on production affects not only countries directly dependent on grain and oil imports from Ukraine and Russia, but also Europe, namely the Mediterranean region. Agribusinesses require large amounts of energy for the production, storage and processing of food. The increase in petrol and diesel {p. 251}prices due to the war has led to a number of logistics difficulties both for the transport of raw materials and finished products. In addition to the increase in transport costs, agrifood companies are faced with the higher costs of running agricultural machinery and heating greenhouses which, together with the increase in the price of gas and petrol, are seriously damaging Mediterranean agrifood systems. In terms of availability of raw materials, the war has caused severe shortages of certain foods and problems with the entire supply chain. Take for example supplies of sunflower oil, which is the basis for the production of many other food products, such as biscuits, preserves, sauces and condiments. As shown in figure 5, Russia and Ukraine play a key role in the production of sunflower seeds.
Tab. 2. Production, consumption and foreign trade of major crops - 2021 (tonnes)
Wheat
Maize
Other coarse grains
Soybean
Other oilseeds
Protein meals
Vegetable oils
European Union
Production
139,004
68,756
84,311
2,811
27,297
25,675
14,726
Imports
3,455
14,500
1,700
11,731
5,278
22,185
10,354
Consumption
102,272
81,023
74,562
14,211
31,634
45,924
22,303
Exports
35,101
3,730
9,878
231
737
1,934
2,373
Russian Federation
Production
75,000
15,000
25,068
4,649
18,273
9,640
7,154
Imports
190
51
135
2,134
259
479
1,432
Consumption
38,513
10,051
21,096
5,229
16,347
7,543
3,514
Exports
30,000
2,500
3,153
1,551
2,168
2,554
5,152
Ukraine
Production
32,075
41,870
11,317
2,714
19,374
6,716
6,137
Imports
15
40
17
10
33
30
277
Consumption
8,481
6,654
5,075
1,299
14,133
1,841
628
Exports
18,844
20,456
6,032
1,421
2,709
4,896
5,775
Turkey
Production
17,700
6,800
6,480
137
1,881
4,431
2,056
Imports
9,000
2,000
2,720
2,833
1,009
2,379
1,485
Consumption
24,256
8,700
9,479
2,958
2,875
6,559
3,171
Exports
3,994
300
151
5
12
252
373
Egypt
Production
9,000
7,500
974
30
120
3,384
823
Imports
12,500
9,500
22
4,120
58
295
1,511
Consumption
21,410
17,150
996
4,149
155
3,671
2,228
Exports
200
0
0
0
23
5
131
 
 
 
 
 
 
 
 
Source: OECD/FAO [2022].
Tab. 2. (it follows)
Wheat
Maize
Other coarse grains
Soybean
Other oilseeds
Protein meals
Vegetable oils
Israel
Production
85
84
59
0
41
7
105
Imports
1,650
1,500
520
561
116
889
98
Consumption
1,785
1,584
579
561
141
893
202
Exports
0
0
0
0
16
3
{p. 252}
1
World
Production
775,445
1,225,520
293,500
355,194
161,299
356,796
215,557
Imports
187,087
179,693
48,684
160,656
19,344
92,183
83,629
Consumption
761,111
1,214,431
295,508
364,122
157,708
360,433
213,652
Exports
189,231
171,814
50,173
154,134
21,396
88.489
85,285
 
 
 
 
 
 
 
 
Concerning production in the Mediterranean region, the difficulties related to the supply of soil fertilizers and the role played in this sector by the Russian Federation need to be considered. Before the war, the country was the leading exporter of nitrogen fertilizers, the second largest supplier of potassium and the third largest exporter of phosphorus fertilizer [FAO 2022b].
– Freight transport and logistics: the conflict has damaged Ukrainian transport infrastructure and seaports, as well as storage and processing services, which has halted trade, especially in the Mediterranean region. In addition, for those ships that manage to set sail, the war has also resulted in an increase in the cost of maritime transport, due to rising insurance premiums or the absence of war insurance contracts for vessels. These factors have contributed to an increase in the cost of food imports [FAO 2022c]. The blockage of ports and sea traffic in an area poorly served by alternative means of transport such as railways or roads is causing much concern, especially among countries that import wheat and oilseed for their livelihoods. This is the case in eastern Mediterranean countries such as Egypt, Jordan, Lebanon, Morocco and Tunisia. The Southern and Eastern Mediterranean countries (SEMED) are among the largest importers of cereals (including wheat) and food products globally. In these countries, wheat plays a crucial role as it contributes more than a third of each country’s total food supply [FAO 2022b].
– Inflation levels: The adverse effects of the war in Ukraine are spreading globally, especially undermining national economies already struggling with national public accounts and/or food {p. 254}dependency on external resources. The Mediterranean countries were severely strained by the pandemic crisis, from which they are emerging with great effort. The Russia-Ukraine war is producing high price rises, not only for energy and transport, but also for the raw materials essential for animal nutrition and food production for human consumption.
Fig. 5. Production volume of sunflower seed in major producing countries in 2022-2023 (in million metric tons).
Source: Statista 2023 on data of US Department of Agriculture.