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Strategic Grain Shortages to Provoke Global Social Instability
Albert Goldson Albert Goldson
New York, NY
Sunday, May 15, 2022

Strategic Grain Shortages to Provoke Global Social Instability

War & Weather | Agricultural Global Markets in a Vise

The Russia's war of aggression in Ukraine has profoundly accelerated the dramatic spike in wheat – classified as a strategic grain - and other agricultural prices due to Russia's blockade of exports with resultant shortages in the world market.


With respect to Ukraine, the wheat planting and harvesting season are practically lost because of the on-going war, particularly in the wheat producing area where hostilities are currently most intense. The following chart entitled Ukraine: Wheat Production provided by the Foreign Agricultural Service, US Department of Agriculture, provides a superb visual of Ukraine's wheat producing region located in & around present-day hostilities. This chart as well as corresponding maps from the aforementioned data source for other Ukrainian agricultural products specifically corn, barley, sunflower seed and soybeans, one access them in my article entitled Agricultural Super Cycle on Steroids published on March 9, 2022.

For this reason wheat exports have been blocked since the war's outbreak in late February 2022.


Although draconian sanctions have been imposed on Russia, the west has "carved out" exceptions by allowing the export of Russian food and fertilizer. The problem is that restrictions on financial transactions with Russia have delayed, and sometimes prevented altogether, export shipments and delivery as importing countries try creative ways to do a legal work around.

The criticality of agricultural exports from Ukraine and Russia is articulated in the link to the following chart entitled Why the War in Ukraine Threatens Global Food Security as provided by the Food and Agricultural Organization of the United Nations.

Alternative Sources: Wheat Shortfalls

Countries heavily dependent on Ukraine and Russia for their wheat supplies are in a tight spot because of severe shortages elsewhere whether in inventory or harvest projections because of weather. Other large wheat producers are encountering difficult weather-related problems deleteriously impacting wheat production and consequently are unable to provide surplus wheat to countries heavily dependent on Ukraine and Russia exports.

India's March heat wave was one of the hottest in their history. According to government sources, they estimate that the heat wave may have damaged upwards of an estimated 25% of their wheat crop. For this reason, the Indian government banned wheat exports. This extreme protectionist policy eliminates wheat exports as a stop-gap relief for many import-dependent and poor countries that would have received exports from Ukraine and/or Russia.

Because India is the world's second largest wheat producer, this removes a considerable amount of additional wheat from the world market. For this reason wheat and other agricultural foodstuffs may no longer be considered fungible and could wreak havoc in the global markets.

Furthermore, as a major wheat producer, India has set a precedent in banning the export of a strategic agricultural commodity caused by weather-related circumstances. Because of India's huge market share, this could trigger a protectionist domino effect for all other wheat and agricultural exporters.

France is the EU's largest wheat exporter and was also counted upon to supplement the shortfall in Russian and Ukrainian wheat exports. Because France's agricultural sector faces near-drought conditions, a normal wheat crop yield is in doubt.

USA: Many agricultural states are suffering droughts especially California, notably in Central Valley, the agricultural heartland. California produces 33% of the nation's vegetables and 67% of the fruits and nuts. Canada is also experiencing drought-like conditions in the agricultural regions.

China is the one of the world's largest producers and consumers of wheat. Winter wheat is to be harvested in June however the crop yield is uncertain due to drought and flooding occurrences during the planting and harvesting season.

To make up for any domestic consumption shortfall, China has the world's largest foreign currency reserves and can push up world market prices by crowding out and outbidding poorer countries for the import of agricultural foodstuffs.

Global Wheat Inventory Quality & Realpolitik

Globally government agencies announced that they have sufficient food inventories to weather the shortages, or at least buy time to secure additional foodstuffs. Understandably governments may not be forthright with their inventory figures in order to avoid public panic and civil unrest.

What governments may not know is the quality of those storage facilities. Degraded food inventory may be unfit for human consumption but can be used as animal feed. If this is the case, once again governments may resort to mixing the good with questionable quality foodstuffs to avoid civil unrest.

The Super Cycle Ride

During the aforementioned 30-day period I believe that despite the meteoric rise in wheat prices, the market repeatedly failed to fully factor in the ominous geopolitical realities and global collapse of climate-related agricultural production.

This trend has been supported by a plethora of highly credible private industry and governmental data including public statements by their respective leadership, and even anecdotal information by farmers themselves that preceded the official governmental and private industry reports.

The Global Socio-Economic Powder Keg

The Russo-Ukrainian conflict and India's ban on wheat exports has jammed the modern historic agricultural safety valve for import-dependent countries in rapidly securing alternate sources of essential grains. This safety valve often bought time for governments regardless of political bent, to mitigate or even avoid massive social unrest. This dilemma places many countries in a lose-lose quandary in seeking food for their increasingly hungry and hostile citizenry. Not even regime change is a panacea if there are no alternate food sources.

The global food crisis and subsequent famine will undo the socio-economic rise of hundreds of millions of citizens in developing and emerging countries from poverty during the past decades into middle class. Not only may this group fall to its previous impoverished condition, it may be worse than the conditions from whence they arose. Furthermore, they'll have more "company" through the collapse of the multi-generational middle class into impoverishment.

Social unrest will be far more intense. Firstly, the first and second generation of the newly arrived middle class from their parents' and grandparents' impoverished condition have "tasted" a civilized, middle class (albeit humble by western standards) lifestyle. Now suddenly they're forcibly returned to the underclass.

Secondly, the multi-generational middle class has the mindset that it's their "right" to have a civilized, reasonably comfortable middle-class lifestyle. Suddenly they're confronting the unthinkable of competing for food and possibly losing their shelter.


The worsening cascade of events along the agricultural farm-to-table supply chain has impacted every node along the critical compounding the crisis. The removal of agricultural exports due to the Russo-Ukraine war and Indian policy reduces the fungibility of grains triggering market seizures and chaos. India's official ban of wheat exports may trigger a protectionist domino effect that will compound the global food shortage and inflation.

The ultimate result occurring sooner than later will be simultaneous civil unrest in developing, emerging and developed countries this summer into fall, a societal crisis government will be unable to avert or resolve with a checkbook.


© Copyright 2022 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.






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