Bloomberg reports:

Russia’s war against Ukraine, while deepening a global food crisis, has made the invader among the biggest winners of the mess it helped create.

The war has blocked Ukraine’s grain exports by sea, cutting off vital supplies for countries from Somalia to Egypt. The disruption, topped by hot weather and droughts that are hurting wheat crops in other parts of the world, has sent prices of the grain to near-record highs and is threatening hunger in parts of the Middle East and North Africa.

Russia has continued to ship its wheat at the now-higher price, finding willing buyers and raking in more revenues per ton. It is also expecting a bumper wheat crop in the next season, suggesting it will continue to profit from the situation. Global wheat prices have risen by more than 50% this year, and the Kremlin has collected $1.9 billion in revenues from wheat export taxes so far this season, according to estimates from agricultural consultant SovEcon.

“This is using food as a weapon of war through global leverage rather than directly attacking a population,” said Tim Benton, Research Director for Emerging Risks at Chatham House, alluding to Russian comments that it would only unblock the Ukranian port of Odesa if sanctions are relaxed. “From a political perspective we are in a kind of new place because of the importance of grain markets.”

By blocking Ukraine’s ports, Russia has forced that country to try and ship grain by land, resulting in exports of only about a quarter of its usual potential volumes.

“Failure to open up the ports is a declaration of war on global food security,” David Beasley, the head of the United Nations’ World Food Program, said at the World Economic Forum in Davos on Monday. Beasley said the lack of access to food may spur millions of people to migrate. [Continue reading…]