Rising tensions in wheat productions, explosion of oil prices, fear of the unknown, could the Ukraine war lead to a popular Arab uprising similar to the one in 2011?
TUNIS — History tells us that in 2010-2011 the rise in prices for raw materials, especially wheat, was one of the main causes of the uprisings that spread across the Arab world.
Today, the conflict between Russia and Ukraine is putting many of the world's economies dependent on wheat imports to the test, notably in North Africa. This prompts the question: Could there be a second “Arab Spring?”
More than a month after the start of the Russian-Ukrainian conflict, Alexandre Zolotov, ambassador for the Russian Federation in Tunisia, reaffirms Moscow’s desire to “continue to contribute to food and energy security in Tunisia.”
Energy Expert Mustapha Haddad underlines in Tunisia, “a high dependence on foreign countries" for energy, with about 57% of the country’s power needs coming from imports, as well as 97% of the electricity mix reliant on natural gas.
Without being able to deploy an operational emergency plan and put into place a crisis strategy, Tunisia can only rely on Algerian gas. The demand in Tunisia is growing and will have to adapt to gas availability and the saturation of the pipeline as well as a cost that was not included in the original budget.
“Winter is over in Europe, barring any surprise, we have passed the mark for 2022 but we will have to organize negotiations and programming for 2023”, clarifies an engineer from the Tunisian Company of Electricity and Gas (STEG).
What applies to energy also applies to cereal and oil seeds. With annual demands up to 1.5 million tons of wheat, 1 million tons of barley and a half-million tons of durum wheat, Tunisia relies on the international market to cover 50 % of its consumption and depends on Ukraine for 40 % of soft wheat.
The current shortage of flour, semolina and other derivatives is mainly due to the appetite of the Libyan market that dries up the availability of these products, which are subsidized by the state and subject to a black market between the two countries.
A tension on the agribusiness, in particular cereals, reflects the increasing trend of world markets in post-COVID recovery and threatens the country's food security.
Tunisia had succeeded, despite its drained public finances, in securing supplies at the end of 2021. But this was without the effects of the war in Ukraine and the difficulty of anticipating a likely increase in the cost of transport and the availability of nitrogen fertilizers, produced in Ukraine and Russia.
With a shortage in funds and a war thousands of kilometers away, the FAO, the UN's food and agriculture organization, ranks Tunisia among the countries with the highest risk of famine: “It seems as though we did not learn anything from the 2008 crisis that had weakened our countries and social balance, and fueled the revolts that occurred a few years later," said a FAO official. "The question of redefining the place of agriculture in the scheme of public policies is essential."
Unexploded missile in a wheat field in southern Ukraine
Since the beginning of the war, the price of numerous foods have risen to unprecedented levels. The price of bread, a staple food for Egyptians, increased by 50%, with the price of a ton of flour rising from 8,500 pounds to 11,000 pounds ($465 to $602). While this increase is partly due to the Russian-Ukrainian war, some accuse storeowners of trying to take advantage of the conflict for price speculation.
“Egypt is one of the main countries affected by the war. It depends greatly on Russia and Ukraine for the importation of main goods, including wheat and corn”, Elhami al-Merghani, a member of the political bureau of the opposition Popular Socialist Coalition party, told Jeune Afrique.
Egypt being one of the largest importers of wheat, has bought 12.4 million tons of wheat in 2021, 80 % of which comes from Russia and Ukraine.
Fearing a popular revolt, the government has tried to reassure its population of 103 million people. Campaigns have also been launched in order to track down the traders who are hoarding staples like flour. The armed forces, the police and the government have announced that they are providing the market with a large quantity of low-cost foods through public sales. The government also provided a quantity of flour to the private market to help stabilize prices and announced a freeze on bread prices.
The state has also banned the exportation of five foods, including pasta, lentils, beans and wheat. While the government hopes that local wheat production will cover needs for the year, it has forced farmers to sell 60 % of their harvest to the state.
There is a palpable impatience against the economic policy adopted by the regime, which has harmed the poor and middle classes.
Economic researcher Abdel Khalek Farouk, president of the independent Al-Nil Center for Economic and Strategic Studies, says anger is rising over increasing prices, especially of bread. "There is a palpable impatience against the economic policy adopted by the regime, which has harmed the poor and middle classes. The poverty rate of the population has now reached 60%. The regime is obviously afraid of the repercussions of this crisis, including a popular revolt."
Anger was already rising in the country, but the Russian-Ukraine conflict may worsen the situation. In early February, 23 days before the Russian invasion, protests against the high cost of living broke out across the country, calling for the resignation of Prime Minister Aziz Akhannouch, who'd been in power only since September.
For months, inflation, currently at +4.7 %, has been wearing away the purchasing power of Moroccans.
All prices have increased: +14 % for mineral water, +5 % for oil, +6 % for flour, while the monthly minimum wage is around 240 euros. The cause: two years of pandemic, sluggish economic growth (0.7 %), a very bad drought, coupled with the global inflation ... and now, the war in Ukraine.
On March 16, the price of fuel reached an all-time high: 11.93 dirhams (1.11 euros) per liter for diesel, 14.18 dirhams (1.32 euros) per liter for gasoline. Never seen before in Morocco, users immortalized the event with their smartphones.
With the arrival of the month of Ramadan, a time where Moroccans increase food consumption — and wheat in particular — national agricultural production has decreased 75%. These last few years, the country experienced a series of serious droughts, each longer and more intense than the other due to the rainfall deficit. Since 2018, the cereal production has been divided by three, while dams do not exceed a filling rate of 30%. et the country is dependent on its agricultural sector, which accounts for 14% of its GDP.
Every year, Morocco imports between 60 and 75 million quintals of grain from the United-States, France, Canada and Ukraine. Ukrainian wheat imports account for 26%, but the global price per ton of wheat has increased 21.3% since last year.
Another pillar of the national economy is tourism, which is increasing again since the borders have reopened after its pandemic closure. But the question remains, until when? While several experts in the sector claim that Morocco could reach the pre-pandemic number of tourists (13 million) before 2023, soaring oil prices could limit the number of travelers.
If in the following months Akhannouch’s government does not succeed in maintaining stability, rising social protest could become a reality.
Already enduring a dire economic situation, Tunisia may also face a wheat shortage and a spike in grain prices if the Russian-Ukrainian conflict continues
“I do not have semolina today but you can find some in other stores”, the manger of a grocery store in Kouba reassures a young woman worried about not finding the products on the shelves.
In Algeria, there is no shortage of flour or semolina, but the population is showing signs of anguish by stocking up on reserves and emptying grocery store shelves on the eve of Ramadan. If the country has not yet given in to panic, it is because it has a secure stock sufficient to cover domestic needs until the end of the year, assures the Ministry of Agriculture.
Algeria is bound to be impacted by the war in Ukraine
After a poor harvest in 2021, with a 38% decrease, Algerian imports of cereal, mainly soft wheat, have increased by 25%. As the second biggest African consumer of wheat, and fifth global importer of grain behind Egypt, China, Indonesia and Turkey, Algeria is bound to be impacted by the war in Ukraine, says Mokrane Nouad, a consultant in the agro-food sector.
"Algeria may benefit from the explosion of the oil price, but being a net importer of food products, whose prices have also risen, means shortages are possible," Nouad tells Jeune Afrique. “Ukraine represents 50 % of the world’s production. Their clients will fall back on Canada. European countries will prefer the option of trading among themselves. The prices will increase and we will reach a point where demand can no longer be met, even though we are only at the beginning of the crisis.”
Algeria imports tender wheat from France, Canada, Germany, the United-States, Spain, Mexico and since 2021, Russia. Russia and Ukraine also represent 20 % of global corn exports and 30 % of barley, the two main cereals used in the livestock sector.
Nouad says it's time for countries in the region to: “develop strategic products in order to ensure our food security and preserve our sovereignty.”