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.
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]. |
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.