The recent military operation in Ukraine has caused a spike in global food prices which could lead to Arab Spring like unrest in some countries.
The Russian advance is cutting off grain exports, bringing global food prices to record highs. Ukraine is known as the “breadbasket of Europe,” and the Russian military operation is choking off the export of the required grains.
Grain prices hit new highs last week, and global food costs are now higher than they were during the 2011 Arab Spring, raising concerns that political unrest sparked by food price shocks could be on the horizon.
The Food Price Index (FFPI) of the United Nations Food and Agriculture Organization (FAO), which measures the monthly change in international prices of a basket of food commodities, revealed record-high prices for February on Friday. In addition, prices are up 3.1 percent since February 2011, when anti-government rallies, riots, and armed rebellions erupted across the Arab World.
The likelihood of another revolt is increasing. Albert Edwards of SocGen, everyone’s favorite permabear, opined two years ago about potential agricultural price shocks and how they could trigger another Arab Spring.
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We’re trying to figure out which countries are the most vulnerable to food price spikes and shortages as a result of the Ukraine situation. Egypt, Indonesia, Bangladesh, Pakistan, and Turkey are among the most dependant countries on Ukraine wheat, according to Bloomberg data.
While there are no signs that any of these countries are on the verge of societal turmoil, keep a watch on them as food prices rise and spring approaches in the northern hemisphere.