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Ukraine Targeted Analysis

  • Targeted Analysis
  • Ukraine
  • January 2023
Ukraine Targeted Analysis

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  • Key Messages
  • Current Status of Conflict
  • Current Food Security Situation in Ukraine
  • Current International Supply and Market Impacts
  • Projected scenario of an ongoing Russian invasion through September 2023
  • Projected food security outcomes in Ukraine through September 2023
  • International supply and market outlook through September 2023
  • Projected Global Food Security Impacts
  • The following report on Ukraine is a targeted analysis conducted by the FEWS NET Early Warning Team in response to ongoing events in the region. FEWS NET does not have a presence in Ukraine and does not cover Ukraine through the standard mechanisms used for monitoring and projecting food insecurity in our 30 reporting countries. As such, analyses on Ukraine are based on available secondary data and analysis. Updated analyses will be produced on an ad hoc basis and can be found here.


    Key Messages

    In Ukraine

    • Ukraine’s economy remains badly damaged by the war, with GDP shrinking by 30 percent in 2022. Though the economy recovered slightly between April and September following the stabilization of supply chains and business activity, recent Russian attacks on energy infrastructure have halted the trend of economic improvement, driven by impacts on the industrial/manufacturing sector. In contrast, other businesses, services, and the agricultural sector have proven fairly resilient to the power outages. Overall, the availability of income-earning opportunities is generally better than in the period immediately following the invasion, though still notably lower than pre-war levels. Significant levels of social support and humanitarian assistance from Ukrainian and international sources are lifelines for the poorest and most vulnerable households, including a large portion of the estimated 5.4 million people currently displaced within Ukraine.
    • Food and fuel prices in Ukraine have declined since mid-2022 but remain significantly elevated. Prices are highest in eastern and southern conflict-affected areas. This is placing significant strain on the ability of poor households to meet their essential food and non-food needs, particularly during the ongoing winter when fuel requirements are high. Poor households that have lost key income sources – such as farmers, factory workers, and irregular wage-earners – who pay rent, and/or who live in conflict-affected areas with the greatest price increases, are likely facing Stressed! (IPC Phase 2!) outcomes if they receive in-kind or cash assistance or Crisis (IPC Phase 3) outcomes in the absence of assistance. Occupied, conflict-affected areas in the south and east are the areas of highest concern.
    • Below-normal income levels and high prices are expected to continue to strain household access to food in 2023. While inflation is expected to ease from current peak levels, it is projected to remain high at an average 18.7 percent. The start of the spring planting season around March will lead to a seasonal increase in income, but this will be limited by the slow pace of exports. Overall, the number of people in immediate need of humanitarian assistance to prevent food consumption gaps and damage to livelihoods is expected to remain within the range of 1-2.49 million people (3-7 percent of those in the country), though needs will decline in the spring as income-earning improves and fuel expenditure needs decrease. Most of the population in need will continue to be located in conflict-affected areas, due to disruptions and damage to income-earning, supply chains, and essential infrastructure, including water and heat.

    Globally

    • The effects of the war in Ukraine drove up already high global energy and agricultural commodity prices. Since peaking in March 2022, global food prices have returned to pre-invasion levels but remain well above 2021 and 2020, a trend that is expected to persist in the coming year. Reductions in the affordability of basic food and essential non-food needs will contribute to high levels of acute food insecurity in 2023, with nearly 130 million people in need of humanitarian assistance across FEWS NET’s reporting countries. The impacts of the war in Ukraine on food availability and access coincide with the impacts of conflict and drought in many countries, including in the Horn of Africa, where unprecedented drought will persist for a third year. 

    • Funding for the humanitarian response to high global assistance needs remains inadequate, aggravated by needs in Ukraine, and the world faces prospects for an impending global recession alongside frequent extreme weather events and water crises due to the impacts of climate change. In this context, the ongoing spiral of eroding livelihoods and resilience is expected to continue, with pastoralist livelihoods particularly threatened. It is essential that donor countries urgently direct efforts toward addressing the root causes of food insecurity – particularly conflict and climate change – and work creatively to respond to acute needs while investing in local livelihoods and economies.

    For background information on 1) the demographics and livelihoods of Ukrainians; 2) Ukrainian agricultural production and exports; and 3) infrastructure and logistics in Ukraine, please refer to pages 3-7 of FEWS NET’s initial analysis found here.


    Current Status of Conflict

    At the peak of Russia’s 2022 invasion, the Russian Armed Forces (RuAF) occupied approximately 163,000 km2 of Ukrainian territory, according to data from Deep State Map and the Institute for the Study of War. Following successful Ukrainian counter offensives from September to November, however, Ukrainian forces had reportedly recaptured 54 percent of territory occupied by Russia since the beginning of the conflict (Figure 1). This includes the recapture of the strategic city of Kherson in southern Ukraine in early November.

    Figure 1

    Map of territorial control in Ukraine as of November 13, 2022
    Map showing territorial control in Ukraine as of November 13, 2022

    Source: Institute for the Study of War & New York Times

    Meanwhile, Russian authorities mobilized around 300,000 reservists and individuals with past military experience in late September. While the RuAF faced difficulties in equipping and training mobilized units of uneven quality, the move did permit the deployment of fresh forces to stabilize the situation on the front lines, contributing to a dulling of Ukrainian initiative on the battlefield. However, since then, the RuAF have made only incremental gains despite heavy personnel losses.

    During the winter months since November, there has been little change in territorial control as both sides focus on regrouping. As of January 2023, Russia now controls an estimated 110,000 km2 of Ukrainian territory. Russian authorities have indicated they are setting conditions for a protracted conventional war in Ukraine. During a meeting with the Russian Presidential Council for the Development of Civil Society and Human Rights (HRC) on December 8, Russian President Vladimir Putin remarked that the “special military operation” in Ukraine could be a “lengthy process.” On January 23, Russian Defense Minister Sergei Shoigu announced that major military reforms would take place between 2023 and 2026, including increases to the number of active-duty military personnel. 

    In October 2022, Russia began targeting Ukraine’s energy infrastructure – including power plants, substations, and transmission lines – with missile and drone attacks in an apparent strategic shift designed to threaten both civilians and the Ukrainian military during the cold winter months. By mid-December, the UN reported that half of Ukraine’s energy infrastructure had been destroyed. To keep the energy supply flowing, utility companies have scheduled daily rolling power cuts and deployed large repair teams. Russian strikes targeting civil infrastructure and urban centers have continued into January 2023, despite reported difficulties in replenishing stocks of cruise and air-to-surface missiles. In January, the Ukrainian government issued emergency appeals to allies to secure the supplies needed to maintain the power grid. The US government is considering an additional 125 million USD in targeted support to include both autotransformers (which are essential to maintain the electricity grid) and generators.  


    Current Food Security Situation in Ukraine

    Civilian Impact and Displacement

    According to UNHCR, an estimated 8.1 million refugees from Ukraine were present across Europe as of February 9, with the largest populations located in Poland and Germany. In general, it is assessed that the international community – including national governments, response organizations, and private citizens – has successfully met the immediate food and shelter needs of most refugees fleeing Ukraine. The Regional Refugee Response Plan (RRP), which was revised in October 2022 to incorporate winter-related needs, coordinated the joint efforts of 142 partners involved in the response.

    Figure 2

    Flow of internal displacement by macro-region as of the January 16 to 23 assessment period
    Depiction of the flow of internal displacement by macro-region as of the January 16 to 23 assessment period. Described under heading Civilian impact and displacement.

    Source: IOM

    According to a rapid assessment conducted by the International Organization for Migration (IOM) between January 16 and 23 (Round 12), an estimated 5.4 million people are internally displaced within Ukraine. The level of displacement has declined since peaking at approximately 8 million people in early May, despite some month-to-month volatility. Most displacement continues to occur in eastern Ukraine, with nearly 70 percent (3.7 million) of the currently internally displaced population originating from the East. While the majority of internally displaced people have remained in their region of origin, some internally displaced households have moved across the country (Figure 2). Nearly 60 percent of the internally displaced population reported that they have been displaced for six months or more as of January. Levels of new displacement are relatively low, with 12 percent of the displaced population reporting they became displaced within the past two months.

    A notable share of the displaced population continues to earn its typical level of income due to their ability to work remotely, even as many others have been separated from their usual income-earning and livelihood activities. Among the internally displaced households surveyed by the IOM in January, the most commonly reported primary source of income was a regular salary (30 percent of respondents). At the same time, the second most commonly reported primary source of income was monthly financial assistance (24 percent of respondents), with greater reliance on these payments reported in Kyiv city and eastern Ukraine. It is noteworthy that internally displaced survey respondents reported a higher monthly income, on average, than non-displaced respondents; however, a higher share (60 percent) of the internally displaced population lives in rental housing and therefore has higher essential expenditures than the non-displaced population surveyed (over 90 percent of whom live in their own homes). Fuel and/or electricity for heat is an additional, necessary expense during the winter months.

    Economic Activity

    Ukraine’s economy has been badly damaged by the war, including due to direct damages, a dramatic decline in foreign investment, and disruptions to exports, supply chains, and the labor force. According to the National Bank of Ukraine, the country’s economy (as measured by real GDP) shrank by 30 percent in 2022. Although the economy showed signs of gradual recovery between April and September, intensified Russian attacks on energy infrastructure since September have halted this trend. The National Bank of Ukraine reports that industrial production – particularly for metallurgy – has been particularly worst impacted by the attacks on infrastructure. On the other hand, other businesses, services, and the agricultural sector have proven fairly adaptable and resilient to the resulting power outages.

    Since the beginning of the war, however, the agricultural sector has suffered substantial damages and losses. According to the Kyiv School of Economics’ Agricultural War Damages Review, damages (defined as the destruction of tangible assets and inventories) to Ukraine’s agricultural sector totaled an estimated 6.6 billion USD by mid-September 2022, while losses (defined as forgone revenue due to higher production costs and reduced production, among others) totaled 34.25 billion USD. When disaggregated by category (Figure 3), damage to agricultural machinery accounted for the largest share of total damages (2.9 billion USD; 44 percent of total damages1). Additionally, the value of stolen and damaged stored products (grains, oilseeds, and other agricultural outputs) was estimated at 1.9 billion USD (28 percent of total damages) and the value of damage to storage facilities was estimated at 1.1 billion USD (16 percent of total damages). Meanwhile, 34 percent of total losses (Figure 4) occurred due to lower crop production in 2022, largely due to losses in potential production of barley, wheat, and sunflower crops whose cultivation is relatively more concentrated in areas directly affected by the conflict.

    Figure 3

    Category of estimated damages to the agricultural sector (totaling 6.6 billion USD) since the invasion
    Pie chart showing the Category of estimated damages to the agricultural sector (totaling 6.6 billion USD) since the invasion

    Source: Kyiv School of Economics

    Figure 4

    Sources of estimated losses to the agricultural sector (totaling 34.25 billion USD) since the invasion
    Pie chart showing the Sources of estimated losses to the agricultural sector (totaling 34.25 billion USD) since the invasion

    Source: Kyiv School of Economics

    Economic experts have warned that the significant wartime government spending to pay government salaries, provide emergency financial assistance to households and businesses, and provide public services is unsustainable in the absence of further, substantial foreign assistance. Despite significant foreign aid received to date, high spending requirements alongside losses of export and tax revenue have resulted in the need for Ukraine to print money to finance an estimated third of government spending, according to analysis by the Centre for Economic Policy Research (CEPR) conducted in August. At the time of CEPR’s analysis, Ukraine’s government deficit was estimated at around 5 billion USD a month or about 30 percent of Ukraine’s monthly pre-war GDP. In the absence of continued significant foreign assistance, CEPR warned that Ukraine’s approach to fiscal and monetary policy would result in an inflation crisis, a currency crisis, or a banking crisis. More recently, in early February, the global ratings agency Moody’s downgraded Ukraine’s credit rating given concerns about the sustainability of the country’s debt as the war drags on. Moody’s now assesses that Ukraine’s obligations are "highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest." As of February, domestic inflation in Ukraine stood at over 26 percent.

    In addition to the significant support needed to stabilize the macroeconomy, substantial investment will be needed to repair the civilian and energy infrastructure damaged by Russian attacks. As of late January, the International Monetary Fund was considering a 14-16 billion USD multi-year aid package for Ukraine. If approved by March as planned, the first disbursement could come in April 2023. The package still requires approval from Ukraine’s creditors and the G7 nations.

    Progress of the Agricultural Season

    Ukraine is among the world’s top producers and exporters of wheat, maize, and oilseeds. According to the Food and Agriculture Organization’s latest survey of agriculture and rural livelihoods in December 2022, around one quarter of respondents across the country reported reducing or suspending agricultural production as a result of the war, with associated declines in income. This figure was higher in front-line areas, at around one third of respondents, and exceeded over 40 percent in the Chernihivska, Sumaska, Odeska, Mykolaivska, and Dnipropetrovska oblasts, which contain territory currently or previously occupied by Russian forces. Active conflict continues to negatively impact agriculture in front-line areas by restricting access to fields and by reducing the available labor force due to population displacement and as citizens join the military. Even in formerly occupied areas, however, the presence of landmines – reported to be spread by Russian troops as they retreat – continues to restrict access to agricultural land in widespread areas. Additionally, across the country, high production costs and the loss of export markets are likely driving reductions in production as well as losses in income. A total of 72 percent of surveyed farmers reported an increase in production costs, with 44 percent reporting significant increases ranging between 25 and 50 percent. 

    Harvesting of winter crops – including wheat and rapeseed – typically concludes around October (Figure 5). According to USDA estimates, Ukrainian wheat production for the 2022/23 marketing year (MY)(July 2022 to June 2023) is expected to be around 21.0 million tons (Figure 6).3 This amount reflects a 36 percent reduction from the previous year’s record bumper harvest of 33.1 million tons, a 17 percent reduction from the 2020/2021 MY production of 25.42 million tons, and a 25 percent reduction from the five-year average. Most of the wheat harvested in July-October 2022 was planted in the fall of 2021 – prior to the start of the invasion – but a decrease in production occurred due to the direct impacts of conflict on access to fields, displacement, and challenges in accessing agricultural inputs, among other factors.

    Figure 5

    Crop calendar for Ukraine
    Chart showing crop calendar for Ukraine. Described under heading Progress of the agricultural season.

    Source: USDA

    Figure 6

    Ukrainian crop production (thousands of tons) in MY 2020/21, MY 2021/22, and estimates for MY 2022/23
    Bar chart showing Ukrainian crop production (thousands of tons) in MY 2020/21, MY 2021/22, and estimates for MY 2022/23

    Source: USDA

    Winter wheat planting for the subsequent MY 2023/24 began in September 2022. According to data from Ukraine’s Ministry of Agrarian Policy and Food, around 3.7 million hectares of winter wheat were sown in Ukrainian-controlled areas as of November 15, amounting to around 97 percent of the projected total of 3.8 million hectares by the end of the season. Total area planted with winter wheat in 2022 is estimated to be at least 17 percent less than the area planted with winter wheat in the same territory in 2021.4 However, using the estimates of area planted across Ukraine in 2021 (including areas currently occupied by Russia), the total area planted in 2022 is 38 percent less than the 6.1 million hectares sown across Ukraine in 2021. The reduction in winter wheat planting in 2022 was primarily driven by high input costs as well as an ongoing pattern of Ukrainian farmers shifting from grain crops to oilseed crops given that the latter fetch prices around two to two-and-a-half times higher and can be transported and exported more easily (which remains important given Ukraine’s challenged internal logistics – including high transportation costs – and limited export capacity). Given this prioritization of oilseed crops, area planted with winter rapeseed was similar to last year. With the planting season reportedly complete as of the end of September 2022, an estimated 1.0 million hectares were planted.  

    Harvesting of maize and sunflower seed, among other crops, typically occurs from around September to November (Figure 5). This year, the conclusion of maize harvesting has been significantly delayed. By the end of January 2023, only an estimated 90 percent of maize had been harvested, a completion rate normally reached by early December. The delay was reportedly primarily due to record rainfall during the harvest period in many production areas. Elevated transportation costs, damage to machinery and infrastructure (which includes limited supply of electricity to dry maize grain), and other impacts of the war also contributed. In December, the Ukrainian Farmers Association pressed for the prioritization of electricity to silos to prevent spoilage of maize. Ultimately, maize production for MY 2022/23 (October 2022 to September 2023), is expected to total around 25.2 million tons, according to estimates from the Ukrainian Ministry of Agrarian Policy and Food in late January. This amount is 37 percent less than last year’s harvest of 40.1 million tons and 17 percent less than the 2020 harvest of 30.3 million tons. While USDA is estimating slightly higher production levels at 27 million tons (Figure 6), this is 20 percent less than the five-year average.

    Meanwhile, USDA estimates that sunflower seed production in MY 2022/23 will total around 10.4 million tons, a 41 percent reduction from the 17.5 million tons produced in the prior year. Ukraine has been the world’s top producer of sunflower seed since MY 2008/09, but the country is forecast to produce the third most amount this year, after Russia and the EU. Given reduced processing capacity, many farmers reportedly switched from processing seeds into oil and meal to exporting seeds, a lower value export product. As of August 2022, only 15 of 100 processing plants were reported to be operational. This has likely reduced typical income for many farmers.

    Agricultural Commodity Exports

    Ukrainian exports have increased significantly since the implementation of the Black Sea Grain Initiative , launched in July 2022 , but challenges persist. In October 2022, Russia announced it would back out of the agreement to create a safe corridor for grain exports through the Black Sea, which was set to expire the following month. This caused a temporary spike in wheat prices. Following conversations between Vladimir Putin and Turkish President Recep Tayyip Erdogan, however, the deal was renewed through March 2023. At first, combined exports of wheat and maize reached near pre-invasion levels in December 2022 (Figure 7). However, Ukrainian authorities have since accused Russia of purposefully delaying inspections of ships in order to limit Ukrainian export capacity through the safe grain corridor.

    In January 2023, the number of ships leaving Ukrainian ports fell to a record low under the grain corridor deal, averaging 2-3 ships per day.  Exports of grains and oilseeds (and their products) also declined by 19 percent in January, amounting to a total 5.5 million tons compared to 6.8 million tons exported the previous month. Only 2.6 million tons of maize and 1.3 million tons of wheat were shipped in January 2023. As of January 28, some 687 ships carrying nearly 19 million metric tons of agricultural commodities had been dispatched using the safe corridor established under the deal. 

    Figure 7

    Ukrainian wheat and maize exports monthly in 2022 compared to five-year average
    Bar chart showing Ukrainian wheat and maize exports monthly in 2022 compared to five-year average.

    Source: USDA Economic Research Service (ERS) using data from Trade Data Monitor and Ministry of Agrarian Policy and Food of Ukraine

    Figure 8

    Ukrainian wheat and corn (maize) exports (millions of metric tons), March-July and August-December 2022, by mode of transportation
    Bar chart showing Ukrainian wheat and corn (maize) exports (millions of metric tons), March-July and August-December 2022, by mode of transportation.

    Source: USDA ERS using data from the Ministry of Agrarian Policy and Food of Ukraine

    Shipments through the three ports operating under the Black Sea Grain Initiative remain the primary route for exporting grain. However, exports of maize and wheat via railway and road transport have increased in response to sea export challenges, even during the period of the agreement. Total maize exports roughly tripled from March-July 2022 to August-December 2022, while total wheat exports rose from 1 million to 8 million metric tons during the same period (Figure 8).

    Food and Fuel Availability and Prices

    Food availability in Ukraine remains above average and more than adequate to meet domestic consumption requirements, based on the volume of stocks at the beginning of the crop production season, significantly lower export levels since the invasion, and additional stocks gained from the recently concluded harvest. The last report published by the Ukraine Cash Working Group's Joint Market Monitoring Initiative (JMMI) corroborates this observation, indicating that food and essential non-food items remained widely available in Ukraine as of September 2022. Market conditions likely remain similar in January, given that supply chains have remained generally stable after initial disruptions in the early stages of the conflict. However, retailers in the South and East have greater difficulty in keeping their stores operational and well-stocked compared to the West and North.

    To complement the JMMI monitoring information, FEWS NET and Premise conducted two mobile phone surveys in Ukraine to better understand market functionality in late November and early December 2022. The demand-side household survey asked 1,641 respondents across the country about their recent shopping experiences, while the supply-side survey reached 164 food vendors in key markets across Ukraine. Respondents to the supply-side survey answered questions about their operations and ability to restock over the past month. FEWS NET used the results of these surveys alongside available information from secondary sources – including information from news outlets, government reports, data from the Armed Conflict Location and Events Data project (ACLED), and ground information from international organizations’ security teams –  to assess market functionality for key cities and transportation corridors (highways) (Figure 9). 

    Figure 9

    Market functionality map, December 2022
    Market functionality map of Ukraine, December 2022.

    Source: FEWS NET

    Responses to the demand-side household survey confirmed that food availability remains high across the country, albeit with relatively lower availability in the conflict-affected eastern and southern cities of Melitopol, Kherson, Luhansk, and Donetsk. However, these cities also had significantly lower response rates than western Ukraine, and the data from these areas is not as robust as the rest of the data.  Meanwhile, responses to the supply-side survey confirmed that markets and trade routes in western areas under Ukrainian control continued to function normally, with high levels of availability of commodities and good physical access to stores. In comparison to the last survey in July, several markets and routes along the frontlines showed improvement as Ukraine made advances in reclaiming territory, with improved market activity reported in Dnipropetrovsk, Karkhiv, Mykolav, and Kropyvnytsky. However, in eastern and southern areas, response rates remain lower and markers of market disruption high. In Kharkiv, all 25 food vendor respondents reported some level of disruption in store operations in the past month, as opposed to just 28 percent reporting disruptions in Kiev and none in Lviv. Additionally, stores across the country continue to report challenges in restocking, with those in eastern areas near the front line facing more challenges. The top three reasons for restocking constraints were high transportation costs, closed suppliers, and low supplier stocks. 

    Despite stable to improved supply chains and market functioning across much of the country, the affordability of essential food and non-food items remains a constraint on household purchasing power and food security among vulnerable Ukrainians. Ukraine’s annual (year-on-year) inflation rate as measured by the Consumer Price Index (CPI) increased sharply throughout 2022, reaching 26.6 percent in December 2022 (Figure 10). In other words, consumers in Ukraine were paying 26.6 percent more, on average, for their normal expenditures compared to the same time of the previous year (pre-invasion). The annual inflation rate for raw foods and processed foods stood at 41.6 percent and 29.3 percent, respectively. To curb inflation, the National Bank of Ukraine announced that it will maintain high interest rates of 25 percent, which have been in place since June 2022. In January 2023, inflation eased slightly as retailers cut the prices of perishable goods due to the fear of spoilage amid frequent power cuts, better-than-expected vegetable and fruit harvests, and the unblocking of some supply routes

    Figure 10

    Annual inflation (%) as measured by the Consumer Price Index
    Chart showing Annual inflation (%) as measured by the Consumer Price Index.

    Source: National Bank of Ukraine

    Figure 11

    National average price (UAH) of various fuels from January 2022 to September 2022
    Chart showing National average price (UAH) of various fuels from January 2022 to September 2022.

    Source: State Statistics Service of Ukraine

    In addition to inflation data, the Food Affordability Index (FAI) – calculated by the Kyiv School of Economics as the ratio of an average salary to the price of a standard food basket – provides further evidence of high domestic food prices. The last available report was released in mid-October 2022. After food affordability as measured by the FAI significantly deteriorated from February to June 2022, food affordability has somewhat improved but remains worse than before the war. Following the invasion, food prices increased while income decreased, and the estimated FAI declined by 10-50 percent by April 2022. Between April and July, improvements in food affordability related to the retaking of territory in the north and stabilization of other front lines was undermined by seasonal increases in the prices of fruits and vegetables. The lowest recorded point in the FAI was 49-75 percent of pre-invasion levels as of July 1. Since then, food affordability has only somewhat improved, largely due to declining prices following the fruit and vegetable harvest in July. As of the latest September 9, 2022 estimate, the FAI was 57-85 percent of pre-invasion levels.

    In conflict-affected areas, prices of food and essential non-food commodities are higher than the national average (Figure 12). According to the JMMI’s September assessment, the average price of the JMMI Basket (a subset of the government’s minimum food basket) remained stable from August to September at the national level. However, in eastern oblasts, the cost of the basket increased by 50 percent during the same period. The trend was driven by a 98 percent increase in the prices of non-food items and a 14 percent increase in the prices of food items.

    High fuel prices continue to be a key driver of elevated domestic food prices, despite a decline in recent months. According to price data from the State Statistics Service of Ukraine (SSSU) as reported by the Ukraine Cash Working Group, fuel prices within Ukraine rose significantly from January to June 2022 (Figure 11), driven by rising global oil prices and conflict-related challenges affecting fuel imports. Although the prices of various fuel commodities declined slightly to significantly from June to September, prices remained notably higher than pre-war levels. As of December 2022, the National Bank of Ukraine has reported stability in fuel prices and a slowdown in the growth of the annual transportation inflation rate since it peaked in July, though the annual fuel inflation rate stood at 69.4 percent. Key informants report that fuel is generally available throughout areas under Ukrainian control, though prices can be volatile and vary notably from one fuel station to another as supply deliveries can be unpredictable.

    Figure 12

    Median prices of the JMMI basket (consisting of 20 food and hygiene items) by oblast in September 2022
    Map showing median prices of the JMMI basket in September 2022. Discussed in Food and Fuel Availability and Prices.

    Source: Ukraine Cash Working Group

    Humanitarian Assistance

    The Ukrainian government and international organizations continue to support the emergency response in Ukraine. According to UN OCHA, humanitarian organizations reached nearly 16 million people with various forms of assistance throughout 2022. This includes 12.2 million people reached with food and livelihoods assistance, and almost 6 million people reached with cash assistance. As part of assistance efforts, almost 30 humanitarian convoys reached 315,000 people in frontline areas in 2022. However, UN OCHA reports that aid organizations have been challenged by numerous types of access constraints throughout the year. Most notably, access has been very difficult in areas impacted by ongoing conflict (including highly populated cities under siege), and no inter-agency humanitarian convoys have been allowed to cross into areas under Russian control. Agencies have also faced some bureaucratic obstacles to operations in areas under Ukrainian control.

    Many humanitarian organizations have scaled up the response further during the cold winter months. In January 2023, WFP and partners reached over 3 million people with food and cash assistance, making it the second month in a row with such a high reach. Of those who received assistance in January, 2.2 million people received in-kind food distributions through a combination of Bread, Rapid Response Ration, and General Food Distribution programs.

    The Ukrainian government has also continued providing – and has in many cases expanded the provision of – essential public and social protection services, including pensions, social welfare payments, subsidies and ceilings for housing and utilities, and assistance for internally displaced households. It has also established programs to provide interest-free or low-interest loans to farmers and businesses, and to provide agriculture inputs and machinery to farmers in need. Notably, the Ukrainian government has continued to pay pension and social welfare benefits into the accounts of citizens in areas that have become occupied by Russia since the invasion. However, many pensioners do not have electronic accounts and instead collect their benefits from Ukrposhta (postal) services (where pensions and other social benefits are distributed). Though mobile Ukrposhta teams have been established and serve Ukrainian-held frontline areas and some Russian-occupied areas at great risk, access remains challenged and can at times be impossible. Additionally, in Russian-held territory in the east and south, ATMs cannot be replenished and Russian forces are reportedly requiring Ukrainian citizens to obtain Russian passports before being able to receive Russian-provided pension payments.

    Current Food Security Outcomes

    Overall, opportunities for income-earning remain below normal but have improved relative to the start of the conflict. Initially, the shocks following the invasion caused many Ukrainians to lose income-earning opportunities due to disrupted supply chains, reduced business activity in conflict-affected areas, and high levels of displacement. The decline in employment opportunities was only partly mitigated by an increase in employment by the military and other essential sectors related to the war effort, in addition to remote work options. Since then, however, active ground conflict has remained localized in the south and east of the country, permitting supply chains to recover in the rest of the country and facilitating the resumption of business activity, which has proven fairly resilient to ongoing Russian attacks on energy infrastructure, except in the industrial/manufacturing sector. In the fall, agricultural activities associated with the harvest and winter planting also boosted economic activity and provided income-earning opportunities along supply chains.

    During the current winter months, income-earning opportunities in the agricultural sector are expected to be at seasonally low levels. Moreover, many farmers are expected to have earned less income than normal due to high prices of agricultural inputs, low producer prices, and low purchasing power among the population. Meanwhile, those employed in the industrial/manufacturing sector – including factory workers – are likely experiencing below-average access to income due to the impacts of ongoing Russian attacks on energy infrastructure. Finally, the availability of income-earning opportunities in many informal sectors – such as domestic work and home improvement – remains depressed amid high inflation and below-average purchasing power for much of the population. Prices of food and essential non-food items remain significantly elevated, and, at the same time, household expenditures are at seasonally high levels due to heating costs during winter.

    As a result, many poor households – especially those who need to pay rent and/or who are receiving insufficient government social support – face difficulty meeting their essential non-food needs without foregoing food, indicative of Stressed (IPC Phase 2) outcomes. In addition, while many middle-income households are likely able to meet their needs by reducing non-essential expenditures, others may be drawing upon their savings or engaging in other coping strategies consistent with Stressed (IPC Phase 2) outcomes. In conflict-affected areas, specifically, the worst-affected poor households – including poor farmers and poor urban households dependent on informal employment and/or lower-wage jobs – are likely facing Stressed! (IPC Phase 2!) outcomes if they are receiving food assistance or facing Crisis (IPC Phase 3) outcomes if they are not receiving assistance. The households that are most likely to have food consumption gaps are those with an elderly or disabled head of household who face physical barriers to accessing income, markets, and/or assistance.

    Many displaced households, both within and outside of Ukraine, were likely in immediate need of food and shelter in the initial period following displacement. However, these displaced households are generally expected to be better-off than many households that remained behind, as displaced households typically have the physical and financial ability to flee. IOM survey data also suggest that most displaced households have income sources that are likely allowing them to meet their basic needs. A significant share of displaced households reports the ability to work remotely, and the government of Ukraine and international organizations also continue to provide assistance to refugees. However, some displaced (past or present) households have faced significant disruptions to their normal income-earning and livelihood activities alongside significantly elevated domestic prices. Worst-affected households are likely engaging in unsustainable coping strategies to meet their needs, and they are likely experiencing Stressed! (IPC Phase 2!) or Crisis (IPC Phase 3) outcomes.

    The World Bank has revised its population estimates for Ukraine, likely due to the significant number of refugees fleeing the country. In the fall of 2022, the World Bank estimated there were 43.5 million people (70 percent urban and 30 percent rural) in Ukraine. However, as of February 2023, this figure now stands at 36.5 million (70 percent urban and 30 percent rural), reflecting a decline of 7 million people. Overall, an estimated 1.0-2.49 million people (3-7 percent of the population remaining in Ukraine) are likely in immediate need of humanitarian food assistance to prevent food consumption gaps and further damage to livelihoods. A disproportionate share of those in need are located in conflict-affected areas, where disruptions to income-earning activities, interruptions to supply chains, and damage to essential infrastructure are impeding access to food, water, and other essential services. Many of those in need likely face food consumption gaps at times when conflict cuts off humanitarian access. However, some of the poorest households across Ukraine who are receiving insufficient social support from the government are also likely in need of assistance, given the impacts of the war on their ability to earn income and given the significantly elevated prices of food and essential non-food commodities.


    Current International Supply and Market Impacts

    Global Energy Markets

    Crude oil prices spiked immediately following the invasion, at least in part due to concerns about the impacts of the conflict, such as potential sanctions on Russian exports. Amid significant volatility in the subsequent months, crude oil prices surged by over 30 percent between February and June 2022. After reaching a peak of over 120 USD/barrel in early June, prices generally declined throughout the remainder of 2022, reaching pre-invasion levels in the fall. As of late January 2023, crude oil prices were generally stable and comparable to early January 2022.

    Global Fertilizer Markets

    Global fertilizer prices first began to increase in mid-2020, well in advance of the Russian invasion of Ukraine (Figure 13). 

    Following the invasion, prices rose even further due to uncertainty about future global availability given the potential for sanctions to impede Russian and Belarusian fertilizer exports. At the same time, export restrictions by China and unprecedented natural gas price increases (resulting in spiking nitrogen fertilizer production costs) in Europe put further upward pressure on prices. Since peaking around April 2022, fertilizer prices have generally stabilized or declined, attributable to both falling natural gas prices and reduced fertilizer demand resulting from lower affordability. In January 2023, prices remained significantly above five-year-average levels.

    Following the invasion, prices rose even further due to uncertainty about future global availability given the potential for sanctions to impede Russian and Belarusian fertilizer exports. At the same time, export restrictions by China and unprecedented natural gas price increases (resulting in spiking nitrogen fertilizer production costs) in Europe put further upward pressure on prices. Since peaking around April 2022, fertilizer prices have generally stabilized or declined, attributable to both falling natural gas prices and reduced fertilizer demand resulting from lower affordability. In January 2023, prices remained significantly above five-year-average levels.

    Figure 13

    Prices of fertilizer (USD/ton) and natural gas (USD/metric million British Thermal Unit), January 2018 to December 2022
    Chart showing Prices of fertilizer (USD/ton) and natural gas (USD/metric million British Thermal Unit), January 2018 to December 2022.

    Source: World Bank

    Figure 14

    Commodities Research Unit fertilizer affordability index, Jan 2006 = 100
    Line chart showing commodities research unit fertilizer affordability index from 2003 - 2022. Discussed in section Global fertilizer markets.

    Source: CRU Group

    Overall, there has been a shift in concern from availability to affordability of fertilizers in the global market. From mid-2021 until mid-2022, fertilizer prices increased faster than crop prices, driving a sharp decline in fertilizer affordability in 2021 and 2022 (Figure 14). As a result, fertilizer consumers adjusted their buying patterns. For example, according to the International Fertilizer Association (IFA), many producers are reported to have bought fertilizers ahead of time (in late 2021) to protect themselves against expected further worsening affordability. As prices rose in the first half of 2022, many producers reportedly postponed their fertilizer purchases, either because they lacked financing or hoped for a decline in prices. According to the IFA, global fertilizer use decreased by 9 million tons (4.8 percent) from Fertilizer Year (FY) 2021 to FY 2022 (Figure 15).

    Figure 15

    Global fertilizer consumption per fertilizer year (FY), millions of tons (right axis) and percent change from previous year (left axis)
    Combined bar and graph chart showing global fertilizer consumption per year in million of tons and the percent change from the pervious year. Discussed in Global fertilizer markets section.

    Source: International Fertilizer Association

    Farmers have been differentially impacted by fertilizer affordability due to variability in prices across fertilizer varieties and geographies in 2021 and 2022. In FY 2022, the largest regional declines in fertilizer consumption are expected to have occurred in East Asia, Latin America, and Eastern Europe and Central Asia (EECA). Across many developing countries, high fertilizer prices pose a particular concern for food production. In Sub-Saharan Africa, disruptions to fertilizer trade from Russia and Belarus and high fuel and transport costs have negatively affected the ability of lower-income producers to source and afford fertilizers and placed pressure on government budgets in countries that implement fertilizer subsidies. African leaders are concerned that lower-income producers will not be able to compete with producers in developed countries who are generally higher-income and benefit from fertilizer and natural gas subsidies. 

    Global Agricultural Commodity Markets

    Ukraine typically contributes a large share of total global exports of wheat, maize, and sunflower oil, amongst other commodities. The uncertainty caused by the Russian invasion of Ukraine caused global cereal prices to spike in March 2022, with several cereals exceeding the records set
    in 2007/08 and 2010/11 to reach the highest levels on record (Figure 16). Since peaking in March 2022, global food prices have returned to pre-invasion levels but remain high. In January 2023, the FAO Food Price Index declined for the tenth month in a row, reaching levels nearly 18 percent below the March 2022 peak but well above 2021 and 2020 (Figure 17). The 10-month decline has been driven by the stabilization of markets and supply chains, declining global demand in response to high prices and rising global supplies from the recent grain and oilseed harvests in the northern and southern hemispheres and the resumption of Ukrainian exports through three key seaports.

    However, while global wheat prices continued to decrease in January 2023, prices of maize, sorghum, and rice increased. Wheat prices decreased following the harvests in the southern hemisphere and strong competition among exporters.  Increased demand in Brazil and concern over dry conditions in Argentina drove marginal increases in maize export prices. Increases in sorghum prices are linked to substitution effects – as the price of maize has incentivized purchases of lower-price sorghum – as well as decreases in sorghum production in the USA. Rice prices increased due to strong demand in traditional exporting countries in Asia, limited supply, and currency appreciation against the USD.

    Figure 16

    Prices of selected agricultural commodities, Jan. 2007 – Dec. 2022
    Prices of selected agricultural commodities, Jan. 2007 – Dec. 2022. Discussed in Current international supply and market impacts.

    Source: World Bank

    Figure 17

    FAO Global Food Price Index, Jan. 2022 – Dec. 2022 (2014-2016=100)
    Line chart showing the FAO Global Food Price Index from Jan 2020 to December 2022. Discussed in section Global agricultural commodity markets.

    Source: FAO


    Projected scenario of an ongoing Russian invasion through September 2023

    Scenario Parameters

    • The war in Ukraine is expected to continue through at least September 2023, and very likely beyond. Engagements will likely continue along the current eastern and southern front lines of Ukraine, with the heaviest fighting continuing in Donetsk and Luhansk oblasts. A peaceful resolution, ceasefire, or even peace talks remain very unlikely in the coming months as both Russian and Ukrainian demands to commence talks remain mutually unacceptable. 
    • The RuAF will likely make small, incremental, and localized gains in Donetsk and Luhansk oblasts, particularly in and around Bakhmut during the spring of 2023. However, it is unlikely that Russian localized advances will result in significant breakthroughs or significant territorial changes. Following the end of the March-April bezdorizhzhia (mud season caused by thawing snow), it is likely that the RuAF will launch a spring offensive in an attempt to capture further territory in the oblasts it unlawfully annexed (likely pushing from Kreminna towards Lyman) and to spoil Ukrainian counter offensives by forcing the repositioning of Armed Forces of Ukraine personnel and assets.  
    • While the RuAF continues to mass troops and conduct military exercises on Belarussian territory, it remains unlikely that Belarus will commit its military forces to the Russian war effort. However, Belarus will likely continue to play a role in providing Russia a base to launch air, missile, and artillery strikes into Ukraine.  
    • The threat of RuAF missile and drone strikes on urban centers and civil and energy infrastructure will remain a persistent threat throughout the projection period, with notable increases around politically significant dates, following localized Ukrainian successes, and in response to announcements of further military aid packages to Ukraine. However, due to difficulties in replenishing stocks of key missile systems, RuAF drone and missile strikes are expected to decrease in frequency, despite continued deliveries of drones from Iran. 

    Projected food security outcomes in Ukraine through September 2023

    In Ukraine, spring planting of maize and other crops is expected to take place from around March to May 2023. The spring planting season is likely to be challenged by high input costs and, in frontline areas, access constraints due to active conflict and mines. The Ministry of Agrarian Policy and Food expects that area planted with maize and other cereals will reduce in 2023 as oilseed planting expands. 

    Harvesting of winter crops such as wheat and rapeseed is expected around July-August. Based on precipitation to date and international forecasts through June 2023, cumulative rainfall during Ukraine’s November 2022 to June 2023 growing period for winter crops is most likely to be near average across most of the country but below average in southern and eastern areas. Temperatures are also forecast to be above average. Given reductions in planted area, expectations for reduced fertilizer use, and other impacts of conflict, winter wheat production is expected to be below average, with production in eastern and southern areas likely to be further impacted by below-average rainfall. On the other hand, rapeseed production is expected to be near normal given near normal area planted and increasing prioritization of oilseed crops. However, significant uncertainty exists, with production outcomes dependent on weather conditions and availability and affordability of fertilizers.

    Beginning with the start of spring planting around April, opportunities for earning income from agricultural labor will seasonally increase again and will likely remain high throughout the projection period. However, reductions in agricultural production – particularly in conflict-affected areas but also due to higher input costs across the country – will likely result in below-normal income-earning opportunities from agricultural labor.

    According to January forecasts by the National Bank of Ukraine, the national economy is expected to grow by a marginal 0.3 percent in 2023. This forecast represents a downward revision to previous modest growth expectations to account for the impacts of Russian attacks on energy infrastructure. The forecast also assumes an extended period of time with restricted port activity. Inflation is projected to remain high in 2023, with the annual inflation rate forecast to average 18.7 percent throughout 2023. Although this reflects a relative slowdown compared to the 26.6 percent inflation rate recorded at the end of 2022, this forecast means that prices are nevertheless expected to continue to rise rapidly in 2023. The forecast is based on expectations for declining global inflation, reduced domestic demand due to power shortages, tight monetary conditions, and announced international assistance. The National Bank of Ukraine has stated it will maintain high interest rates of 25 percent, which will limit investment.

    Generally stable levels of economic and business activity and the continuation of some exports through the Black Sea ports will likely maintain stability in income-earning activities. However, the slow pace of exports, large accumulation of agricultural commodity stocks within Ukraine, and low producer prices will likely continue to limit farmers’ income from crop sales, including export commodities. The limitations on household income, coupled with rising domestic food and essential non-food commodity prices, will further strain household purchasing power through September 2023. 

    Overall, government and humanitarian support is expected to play a key role in mitigating the level of acute food insecurity in Ukraine. Some poor households currently facing Stressed (IPC Phase 2) outcomes will likely exhaust available coping strategies such as spending savings, borrowing, and reducing essential expenditures given below-normal levels of income and anticipated further declines in purchasing power. Poor households who have sustained the largest declines in income will face Crisis (IPC Phase 3) outcomes. However, the number of households who exhaust available resources and coping capacity is expected to be limited due to expanded government social support and humanitarian interventions in the country. The population in need of humanitarian food assistance is expected to remain within the range of 1.0-2.49 million people in Ukraine, primarily concentrated in the conflict-affected south and east. The populations of highest concern will remain those who face a combination of low income, high monthly expenditures due to rent and heating needs, and limited access to government support, especially vulnerable groups such as the elderly and disabled.


    International supply and market outlook through September 2023

    Fertilizer

    Overall, fertilizer prices are expected to remain high in 2023, which is likely to affect fertilizer purchases and application throughout this year. The nitrogen-based fertilizer market is anticipated to remain the most volatile in 2023 given its direct link with oil and natural gas prices. This trend is of particular concern for maize producers as nitrogen fertilizer is one of the primary inputs in maize production. Ultimately, higher fertilizer costs relative to commodity prices will result in a decrease in producers’ profit margins in the 2023 growing season as compared to the past two years. However, profit margins are still expected to be positive

    Agricultural Commodities

    Global agricultural markets will continue to face significant challenges in 2023. Beyond production and export shortfalls in Ukraine, agricultural markets are likely to be impacted by below-average global grain production, worsening global growth prospects and deteriorating macroeconomic conditions (which will, in turn, reduce demand and affect business planning), high input and energy costs, and potential shifts in trade and biofuel policies. There is also a high level of uncertainty surrounding the future of the Black Sea wheat supply given the potential for Russia to be uncooperative. 

    According to estimates from the International Grain Council (IGC) in February 2023, global grain production in MY 2022/23 (October 2022 to September 2023) is projected to decline by two percent compared to the prior year, with lower production of maize and sorghum outweighing higher production of wheat, barley, oats, and other coarse grains. According to estimates from the USDA, global wheat production in MY 2022/23 is expected to be two percent above the five-year average while global maize production is expected to be 0.14 percent below the five-year average. Wheat production is projected to increase by 0.4 percent from last year’s record production levels despite reduced production in Ukraine. However, due to expectations for higher levels of consumer demand, stocks are expected to decline by an additional three percent. 

    Meanwhile, maize production is projected to decrease by five percent compared to last year – largely due to reduced production in Ukraine – which is anticipated to contribute to a nearly 10 percent decline in maize stocks, despite expectations for lower consumption. 

    In 2023, inflation will continue to create challenges for producers in the agricultural sector. High input and fuel prices will ultimately exert upward pressure on agricultural commodity prices as farmers seek to recover their production and transportation costs. Moreover, monetary policy measures – such as interest rate hikes – enacted by governments in efforts to address inflation are likely to make it more expensive for some producers to borrow money. Further, as the United States raises interest rates, a stronger USD will continue to place upward pressure on the prices of commodities traded in USD. Even though rising interest rates are expected to gradually contribute to easing inflation, a stronger USD will still make imports more expensive and exports less expensive for countries outside of the US who trade commodities in USD. This has negative implications for the trade balances of other countries, including many developing and emerging economies.  A worsening trade balance can in turn cause further currency depreciation and inflation of local prices. 

    Consequently, the World Bank projects that global wheat and maize prices in 2023 (Table 1) will be lower than in 2022, on average, but higher than 2021 and the five-year average. High wheat prices will primarily be driven not only by high fuel, transportation, and borrowing costs, but also tight stocks and reduced exports. Similarly, upward pressure on maize prices will be exacerbated by production declines in Ukraine, the European Union, and the United States alongside high nitrogen fertilizer costs. Global rice prices are projected to remain similar to last year’s elevated prices due to reduced production and lower stocks.  Contract prices can also provide insight on future price trends, as the price of the contract is typically a strong indicator of commodity prices at the time of the contract’s expiration. Contract prices reported by the Wall Street Journal indicate that key commodity prices will likely remain below the 2022 average but above the five-year average through September 2023. This is broadly consistent with the World Bank’s forecast. 

    Table 1
    Select World Bank commodity price forecasts per metric ton
      202020212022f2023f
    PricesMaize$165$260$315$290
    Rice, Thailand, 5%$497$458$435$435
    Wheat, U.S., Hard Red Winter$232$315$430$410
    IndexesOils and Meals89.8127.1145.7134.3
    Grains95.3123.8149.3141.0

    Source: World Bank

    Figure 18

    Estimates of global biofuel production per billion liters from 2005 to 2022 and projections through 2025
    Bar chart showing estimates of global biofuel production per billion liters from 2005 to 2022 and projections through 2025. Discussed in section Agricultural commodities.

    Source: World Bank

    Uncertainty in global agricultural commodity supply, demand, and price forecasts exists due to several factors. Production prospects – in terms of the quantity and quality (which in turn affects prices) of crops produced – depend on the evolution of weather conditions during the current season. Additionally, biofuel production is projected to increase modestly during the next three years (Figure 18), with notable implications for demand for sugarcane and maize (for ethanol production) and edible oils (for biodiesel production). In view of the recent energy supply disruptions and surging prices last year, production of biofuels could increase beyond what is currently anticipated as policy makers try to address energy security concerns. Finally, it will still be important to monitor trade policies as the potential for disruptive trade restrictions exists.


    Projected Global Food Security Impacts

    The effects of the war in Ukraine on global energy and agricultural commodity markets have pushed already elevated prices of staple foods and other essential commodities farther upward around the world. According to information compiled by the World Bank from October 2022 to January 2023 (Figure 19), inflation remains high (above five percent) in 83.3 percent of low-income countries and 90.2 percent of lower-middle-income countries, down only slightly from 88.9 percent and 91.1 percent, respectively, recorded in the May to September 2022 period. Even net food exporter countries are experiencing rising food prices, driven by the rising trend in fuel and agricultural input prices.

    Figure 19

    Food inflation heat maps
    Two heat maps showing food inflation and real food inflation. Discussed in section Projected global food security impacts.

    Food inflation heat map (left) and real food inflation heat map (right) based on the last month between October 2022 and January 2023 for which the food component of Consumer Price Index data is available. 

    Source: World Bank using data from the International Monetary Fund, Haver Analytics, and Trading Economics

    Significantly elevated prices of food and essential non-food commodities related to the war in Ukraine are having an outsized impact on consumer purchasing power in many food-insecure countries. Many poor households were already experiencing slight to significant declines in their purchasing power and facing difficulty meeting their essential needs due to the negative impacts of the COVID-19 pandemic on income-earning activities and global food prices. Currently, high input and operating costs are stressing normal business and livelihood activities, reducing the availability of income-earning opportunities for poor households. High agricultural input prices are preventing many poor farmers from cultivating at normal levels and/or applying typical amounts of fertilizer, which is in turn reducing the availability of food and income from crop production. Given that fertilizer prices have remained significantly elevated in the latter half of 2022, despite some declines, the negative impacts on planted area and crop yields are expected to be realized in upcoming harvests throughout the projection period. 

    These impacts coincide with the impacts of conflict and drought on food security in many countries, including in the Horn of Africa, where a forecast of a sixth consecutive poor rainfall season from March to May 2023 will continue to drive already unprecedented drought conditions. Households in the eastern Horn will continue to face not only extensive crop and livestock losses due to local shocks but also steep increases in imported food prices, leading to a risk of Famine (IPC Phase 5) in Somalia

    With domestic prices and acute food insecurity also of concern in many high-income countries that lack adequate social safety net programs, the attention of many traditional donor countries is focused on problems closer to home. The World Bank reports that 91 percent of upper-middle-income countries and 85.5 percent of high income countries are experiencing year-on-year inflation levels above 5 percent (down only slightly from 96 percent and 85.7 percent, respectively, recorded in the May to September 2022 period). Changes in donor priorities, alongside atypically high global food assistance needs and high energy and commodity prices that make food aid more expensive, have resulted in reductions to humanitarian aid funding by some key donors – a trend identified by an analysis of funding levels in 2021 that has continued in 2022. Many severely food insecure countries are going without adequate assistance that is urgently needed to save lives, and some – such as South Sudan – have experienced recent reductions in already inadequate assistance levels. 

    In this environment of high global needs and inadequate resources for assistance, the world is also facing a potential global recession, continued high levels of inflation, and more frequent extreme weather events and water crises due to the impacts of climate change. The traditional emergency food aid response is already inadequate, and rising levels of acute food insecurity risk a reinforcing cycle of deteriorating local economies and livelihoods and further erosion of household coping capacity. For example, given the severe impacts of the unprecedented drought sequence on livestock ownership in the Horn of Africa alongside the likelihood of more frequent extreme weather events, there are credible concerns that traditional pastoral livelihoods are becoming no longer viable. In this context, the continuation of a status quo defined by a limited emergency response will not prevent but rather permit the ongoing spiral of eroding resilience and, overall, rising levels of acute food insecurity amid the compounding effects of future shocks. It is essential that donor countries urgently direct efforts toward addressing the root causes of acute food insecurity – particularly conflict and climate change – and think creatively about how to address acute food needs while supporting local livelihoods and economies. 

    Country-Specific Impacts

    FEWS NET’s latest analysis projects that the number of households in need of emergency assistance to prevent food consumption gaps will remain high in 2023, with the greatest absolute numbers of people in need in: Ethiopia (over 15 million), Yemen (over 15 million), Nigeria (over 10 million), the Democratic Republic of the Congo (8-10 million), Somalia (8-10 million), South Sudan (5-8 million), and Sudan (5-8 million). While it is impractical to disentangle the impacts of the war in Ukraine with the impacts of other drivers, the following summarizes FEWS NET’s key concerns for acute food insecurity in its 30 monitored countries, including any key impacts related to the effect of the war in Ukraine on global food and fuel prices.

    • Ethiopia: The long-term impacts of the conflict in northern Ethiopia and the drought in southern and southeastern Ethiopia have sharply diminished food availability and access for millions of households, who face considerable difficulty purchasing sufficient staple foods and agricultural inputs. Poor macroeconomic conditions are also driving acute food insecurity across the country more broadly, particularly among households affected by conflict and/or rainfall deficits who have insufficient income to meet their minimum food needs. Ethiopia's large staple food import requirements and inadequate foreign exchange reserves, coupled with high global food and fuel prices, continue to contribute to high inflation. Annual headline inflation remained high in January at 33.9 percent, while the last reported food inflation rate hit 32.9 percent in December. Additionally, fuel prices increased by 7 percent in January, which is expected to contribute to further food price increases in the coming months. Although the meher harvest in western, southern, and northern Ethiopia has relatively improved food availability and access, total production was below average; many households will only have access to food from own production for a few months, and conflict-affected households in the north who had the opportunity to cultivate are expected to rapidly exhaust their food stocks. Finally, high fuel and food costs continue to place pressure on budgets for the humanitarian food assistance response.
    • Somalia: The record-breaking drought in Somalia, exacerbated by high global food and fuel prices, continues to drive high levels of acute food insecurity. Multiple poor-to-failed crop and livestock production seasons have decimated food and income sources for rural populations, and staple cereal prices remained up to 65 percent above the five-year average in January. The large national cereal deficit, the long-term constraints imposed by conflict and insecurity on economic activity, and Somalia’s vulnerability to high global food and energy prices given its net importer status continue to limit the ability of the rural and urban population to earn income through off-farm income sources and purchase sufficient food. The livestock sector, which accounted for over 60 percent of GDP in 2013-2016 and over 70 percent of total export earnings in 2011-2016, has taken significant losses due to the drought. At the same time that foreign revenues have fallen, the World Bank estimates that Somalia’s import bill has risen by 10 percent year-on-year – a trend that first began in mid-2021 amid high shipping container costs and pandemic-related, global supply chain issues and accelerated in 2022 amid the impacts of the Ukraine crisis on global food and fuel prices. However, the pace of food inflation has notably slowed, decelerating from a peak of 17.5 percent in July to 6.7 percent in January.
    • South Sudan: Cycles of conflict, flooding, and displacement, amid long-term macroeconomic challenges, continue to drive very high levels of acute food insecurity within South Sudan. Rising levels of conflict in early 2023, especially in the north and east, are compounding the impacts of a fourth consecutive year of widespread flooding in 2022. These factors have severely limited typical crop and livestock production activities and market functioning and trade, resulting in high levels of displacement, few income-earning opportunities, and very low food availability and access for the majority of the population. High global food and fuel prices have exacerbated the effects of these shocks on already exorbitant staple food prices. As an oil producer, higher oil revenues are expected to contribute to economic growth, but fluctuations in oil revenue, along with disruptions to the peace process and climate change effects, will remain the main downside risks to growth. In December, sorghum prices ranged from 130 to 270 percent above the same time last year and 225 to 275 percent above the five-year average in major markets. 
    • Yemen: Conflict and poor macroeconomic conditions continue to limit income-earning opportunities and drive significantly above-average prices of food and essential non-food commodities in Yemen. According to the FAO, the average cost of the minimum food basket in December was double the five-year average in Aden and 32 percent above average in Sana’a. Alongside the expiration of the nationwide ceasefire, the Sana'a-based authorities (SBA) have shifted tactics to increasingly target oil infrastructure in areas controlled by the internationally-recognized government (IRG). Due to the risk of drone strikes, oil exports from IRG-controlled ports have remained effectively suspended since October. This loss of important revenue will further threaten the IRG's ability to fund public services, pay civil servant salaries, and perhaps even continue its foreign currency auction mechanism. In retaliation, the IRG and Saudi-led coalition are again delaying the clearance of fuel ships for docking in SBA-controlled Red Sea ports, with fuel shortages expected to resume in SBA areas in the near term (1-3 months) as a result.
    • Nigeria: Amid ongoing conflict in Northeast, Northwest, and North-central Nigeria, and extensive floods across the country, poor macroeconomic conditions – exacerbated by high global food and fuel prices – continue to constrain access to food for millions of households. Various economic policies, declining government revenue, and rising public expenditures continue to drive the depreciation of the Nigerian Naira against the USD on the official and parallel markets to very low values. These factors, coupled with high global commodity prices, pushed the headline inflation rate to 21.8 percent in January, the highest level observed since 2005. Fuel shortages, which are linked to fiscal pressures on the government petrol subsidy, and rising fuel prices are also contributing to high food production and transportation costs and constraints on economic activity. Additionally, the ongoing main season harvest is below average, mainly attributable to conflict, flooding, and high input prices. While the start of the harvest has resulted in a slight decline in prices for some food items, prices are expected to remain well above average even after the harvest is completed.
    • Afghanistan: The national wheat production deficit in 2022 was above normal and millions of people in Afghanistan continue to experience an overall reduction in access to food and income due to the impacts of multi-year drought and economic shocks – including the Taliban takeover in 2021 and the Russian invasion of Ukraine – on livelihoods, income-earning opportunities, and food and non-food prices. Although food inflation has significantly declined since peaking at 26 percent in June and just 5.2 percent in December, food prices, including that of staple wheat flour, remain above average. Nationally, the average price of wheat flour trended 15 percent above the two-year average in December. At the same time, fuel prices remained around 35 percent above the previous year. Food and fuel commodity prices are expected to remain above average and further increase in the coming months due to high global energy prices and typical seasonal trends during the winter and lean seasons.
    • Sudan: Political instability continues to result in poor macroeconomic conditions in Sudan, defined by slow economic activity, depreciation of the local currency, and extremely high inflation. Millions of households have insufficient access to food, especially in conflict- and flood-affected areas where livelihood activities are particularly limited. While Sudan's trade relationship with Russia has helped to mitigate the impacts of high global commodity prices, Sudan's large staple food import requirements mean the country is still vulnerable to high global food and fuel prices. As a result, annual headline inflation remained very high at 87.3 percent in December, despite recording a decline for nine consecutive months. Driven by the ongoing harvest, cereal prices declined by 20-30 percent from October to January but remain four times higher than the five-year average. Prices are expected to decline through the end of the harvest period in February but will most likely remain above average throughout the harvest season. Areas with typically marginal harvests and areas with high levels of displacement are of highest concern, particularly since conflict typically rises after the harvest. 
    • Kenya: While the record-breaking drought is the primary driver of high levels of acute food insecurity in Kenya, global food and fuel prices have exacerbated the consequences of Kenya's reduced agricultural output and weakened Kenya's post-pandemic economic recovery. According to the Kenya Bureau of Statistics, annual food inflation was 12.8 percent in January, only slightly down from the peak of 15.8 percent that was reached in October. High staple food prices – particularly maize – and below-normal household income continue to constrain household purchasing power and limit household access to food across the country. The impact of high prices on access to food is particularly concerning for market-dependent pastoral households, who are heavily relying on government safety net programs and limited labor income amid large-scale livestock losses, low livestock salability, and low goat-to-maize terms of trade. However, annual headline inflation slowed for the third consecutive month to 9.0 percent in January, the lowest since August 2022.
    • Burkina Faso: High global food and fuel prices continue to exacerbate economic challenges within Burkina Faso, where political instability, conflict, and insecurity have hindered agricultural and livestock production and reduced economic investments. Food inflation reached a record high of 30.7 percent in July 2022 but has since decreased to 10.8 percent in January.  Households in some areas of northern Burkina Faso concurrently face below-average food and income from the 2022 harvest, as conflict, significantly high fertilizer prices, and insufficient and delayed fertilizer subsidies occurred during the crop-growing period. These challenges are reducing household access to food, with staple food prices remaining 50-85 percent above the five-year average in accessible markets during the post-harvest period in November, while prices in blockaded areas were more than triple the average. Reductions in household food availability and access are most severe in the conflict-affected Sahel Region, especially in the town of Djibo, where food prices skyrocketed to 600 percent above the five-year average in December.
    • Madagascar: Multiple consecutive years of drought are the main driver of acute food insecurity in Madagascar, particularly in the Grand South. Extremely poor maize, cassava, and sweet potato harvests in 2022 have severely diminished food availability and access, especially in the southwest. These significantly below-average harvests have consigned      households to purchase an increasing share of their food needs in the market at a time when      the impacts of the Ukraine crisis on global food and fuel prices are contributing to limitations on household purchasing power and access to food. General inflation rose to 10.8 percent in November, the highest since January 2018. Fuel and transportation have been key drivers in this increase in general inflation, but the government's price cap on imported rice has helped mitigate some of the impacts of global prices on food in Madagascar. Still, domestic factors have increased most food prices to above last year's levels and the five-year average, with effects of these increases likely to be most acute through March when the annual lean season will peak. Ongoing agricultural input distributions and expectations of average rainfall are likely to improve food availability and access in the Grand South after the 2023 harvest.
    • Haiti: Escalating gang violence, heightened civil unrest, and poor economic conditions are worsening the severity of acute food insecurity in Haiti. The increase in violence and contraction of the economy have significantly disrupted market functioning and reduced household income-earning opportunities; agricultural production is also below normal. At the same time, low government revenue and Haiti's status as a net food importer have left it vulnerable to high global food and fuel prices during the Ukraine crisis. The local currency has continued to depreciate against the US Dollar, with the exchange rate reaching a record high of 147.3 HTG/USD in January 2023. Fuel shortages and elevated fuel prices have persisted across the country even after the government regained control of the Varreux fuel terminal in November, with significant impacts on economic activity and food prices. In December, imported food prices trended nearly 120 percent above the five-year average and food inflation remained very high at 47.7 percent.
    • Democratic Republic of the Congo: Conflict and insecurity remain the key drivers of acute food insecurity in the DRC, where violence not only directly disrupts household livelihood activities but also limits market functioning and supplies in the worst conflict-affected areas, such as Ituri and North Kivu. Conflict-related factors, along with chronically poor road conditions, are primarily responsible for elevated staple food prices. However, the country's status as a net food importer has also left it vulnerable to high global food and fuel prices, even though strong export earnings – boosted by soaring global commodity prices – have helped to offset a rising import bill. Annual inflation hit 12.8 percent in December, and staple food prices averaged around 50 percent higher than the five-year average. Similarly, fuel prices have increased by 18 percent since early 2022.
    • Zimbabwe: In Zimbabwe, the main drivers of acute food insecurity include significantly below-average maize harvests in 2022, grain trade restrictions, and long-term macroeconomic challenges, resulting in below-normal income-earning opportunities for many households. High global food and fuel prices have also contributed to the weakening of the local currency, which depreciated by over 70 percent on the parallel and official markets between January and August 2022. Since August, Central Bank interventions have helped to somewhat stabilize the macroeconomic situation, but annual food inflation remained exorbitant at 263.8 percent in January 2023. Regional maize imports via the private sector are assisting in closing the gap between the national maize deficit and consumer demand, but the prices of most goods and services are out of reach for most poor households, who face food consumption deficits. 
    • Malawi: A decline in foreign exchange revenues from tobacco exports, coupled with regional supply shocks and rising import costs due to high global food, fuel, and fertilizer prices, has contributed to the weakening of the local currency -- which was already devalued by 25 percent in May – and high food inflation. Food inflation rose steadily throughout 2022 and only dipped slightly downward to 31.3 percent in January. In December, the average price of maize across monitored markets was around 190 percent higher than last year and around 155 percent above the five-year average. The high inflation rate continues to decrease both urban and rural household purchasing power and limit access to food, especially among very poor households in the south that have low own-produced harvests and limited incomes. 
    • Niger: While the Ukraine crisis has contributed to higher energy and food import prices in Niger, Niger sources most of its food from local production and neighboring countries and has benefitted from policy interventions by both the national government and the Central Bank of West African states. The government's removal of import taxes and implementation of subsidies for cereals, fertilizers, and animal feed, along with the delivery of humanitarian food assistance, is expected to continue to mitigate the severity of acute food insecurity outside conflict-affected areas. Annual food inflation has shown a declining trend since March 2022, falling to 3.9 percent in December. However, conflict-affected areas, such as Tillabéry, which have reduced market functioning and supply, have experienced higher prices compared to the rest of the country. The pace of fertilizer price increases is a broader concern, trending more than 70 percent above both last year and the five-year average in December. 
    • Mali: Conflict is the main driver of acute food insecurity in Mali, particularly in the Liptako-Gourma region, where levels of conflict have reached record highs. While the start of the 2022 harvest in October brought relative improvement in food availability and access to most of the population, conflict-affected households face crop and livestock losses and increasing difficulty purchasing sufficient food. High food, fuel, and agricultural input prices are limiting their access to food, particular in the aftermath of ECOWAS economic and financial sanctions, which have reduced the government's ability to implement subsidies. Fuel prices rose by nearly 20 percent between June and November 2022, which in turn contributed to an annual food inflation rate of 14.4 percent in November. Staple food prices are highest in insecure areas with disrupted market functioning and trade flows. Additionally, fertilizer prices have risen more than 70 percent above the five-year average, contributing to reductions in the cultivation of crops such as maize, rice, and cotton, the latter of which is the country's main agricultural export product. The expected decline in planted acreage and yields will reduce the income of many rural households, place pressure on the country's foreign exchange reserves, and contribute to maintaining high food prices in 2023.
    • Mozambique: Conflict and recent weather shocks are the main drivers of acute food insecurity in Mozambique, resulting in locally significant crop losses in the north and the south despite a net increase in national crop production in 2022 compared to 2021. The net increase in the harvest, coupled with government interventions to stimulate the economy and contain inflation, have generally helped to mitigate the impacts of high global food and fuel prices in the surplus crop-producing areas. However, mixed staple food price trends are observed across the country, with elevated prices concentrated in the drought- and cyclone/storm-affected areas. In January, the annual food inflation rate increased to 15.7 percent. Overall, reductions in household purchasing power and access to food are mainly observed in the areas of concern in the north and south, and needs are expected to increase as household reliance on markets increases during the typical lean season (October-February).
    • Guatemala: While the availability of local and regional crops has muted the economic impacts of the Ukraine crisis on food security in Guatemala, weather-related crop losses in some areas coupled with elevated food and fuel prices remain a concern, particularly in the eastern Dry Corridor and eastern highlands. High agricultural input prices, including fertilizer, are also contributing to reductions in planted acreage and crop yields among subsistence farmers, though commercial producers are less affected. Headline inflation has remained stable at around 9 percent since September, partly due to inflows of locally produced maize and beans to the markets; however, food inflation increased to 13.3 percent in January, with maize and bean prices rising above last year and showing little seasonal decline.
    • Central African Republic (CAR): High global food and fuel prices have exacerbated macroeconomic challenges within the CAR, where protracted conflict continues to limit agricultural productivity and economic activity. While locally produced crops performed better in 2022 compared to the past few years, limited income-earning activities and high food prices continue to constrain household access to food, especially in conflict-affected areas where crop production is lower, and in urban areas where households are more reliant on markets to purchase their food. After several months of repeated disruptions to local fuel supplies, the government proceeded to increase prices by 50 to 70 percent in early January. This is expected to drive up the price of transport, food, and non-food items in the coming months. 
    • Uganda: High global food commodity prices have had a less direct effect on Uganda, which is a surplus food producer and major regional exporter, even when crop production is below average. However, high global fuel prices and high domestic and regional demand for staple foods are driving atypically high food prices. Many countries in the East Africa region have had several consecutive seasons of below-average crop production, which has led to an atypical increase in market reliance among the region's rural population. While Uganda's annual headline inflation rate stood at 10.4 percent in January, annual food inflation has risen more rapidly and hit 22.9 percent in January. These trends are exacerbating the impacts of below-average crop production on acute food insecurity in several areas within Uganda, especially in the Karamoja sub-region, where the recent harvest was below average for a third consecutive season.
    • Cameroon: High global food and fuel prices continue to exacerbate Cameroon's domestic economic challenges, leading to historically high food inflation. After averaging only 2.8 percent from 2014 to 2021, annual food inflation reached an all-time high of 15.5 percent in September 2022, based on the last available government update. In December, sorghum and maize prices were up to 25 percent higher than the preceding year and up to 60 percent higher than the five-year average. Cereal prices are highest in the Far North region due to locally low harvests in late 2022 and high export demand. While the government has implemented various price control measures – such as a ban on exporting cereals and vegetable oils, large fuel subsidies, and import tax exemptions – there is concern that the subsidies will worsen the fiscal deficit and further weaken economic conditions. Overall, the reductions in household purchasing power and food access are of highest concern in the conflict-affected areas in the Far North, Northwest, and Southwest regions. 
    • Angola: The negative impacts of the Ukraine crisis in Angola have been mostly nominal, mainly due to the beneficial effects of high oil prices on the Angolan economy. Increased foreign reserves and the appreciation of the kwanza have moderated inflation greatly, with a declining trend in food inflation observed over the course of 2022, from 36.2 percent in January to 11.1 percent in December. A more favorable weather forecast is expected to improve harvest prospects for the 2022/2023 production year compared to the past drought years, though high fertilizer prices will affect crop yields.
    • Chad: Conflict is the main driver of acute food insecurity within Chad, particularly in the Lac Region. However, high fertilizer prices, insecurity, and flooding contributed to localized below-average harvests. The decline in local production, coupled with the impacts of insecurity and high global food and fuel costs on imported food commodities from Libya, is contributing to high local food prices. Annual food inflation spiked to 21.6 percent in November, with staple food prices ranging from 30 to 45 percent above average, before dropping to 16.2 percent in December. In January, millet prices ranged up to 45 percent above the five-year average. On the other hand, high oil prices have boosted foreign exchange revenues from oil exports and prevented steeper increases in import-induced inflation. 
    • Honduras: Overall, the availability of local and regional crops has muted the economic impacts of the Ukraine crisis on food security in Honduras, where weather-related crop losses are localized and harvests are generally favorable. Reductions in planted acreage and crop yields due to high agricultural input prices are affecting subsistence farmers, but commercial production remains near normal. However, annual food inflation in Honduras hit 16.2      percent in January – nearly the highest level recorded since 2008 – which can only be partially offset by seasonal increases in income.
    • Burundi: The availability of locally produced crops is supporting food security across most of Burundi; however, high food, fuel, and agricultural input prices have reduced food availability and access among poor subsistence farming households in the east and north. Rising import costs are contributing to the depreciation of the local currency, with a widening spread between the official and parallel market exchange rates. On an annual basis, the inflation rate in Burundi reached 27 percent in December, while food inflation was nearly 40 percent; this level of inflation has been sustained for two consecutive months. Maize and bean prices ranged from 30 to 120 percent above last year and 35 to 50 percent above the respective five-year averages across monitored markets. 
    • Mauritania: The availability of locally produced crops from an average cereal harvest is currently mitigating the impacts of high food prices within Mauritania. However, poor households concurrently face declines in seasonal income-earning opportunities amid an economic slowdown, reducing their financial access to food. Given the country's status as a net importer, high global food and fuel prices are contributing to elevated food inflation, which reached 15.9 percent in January. The price of wheat, in particular, rose by nearly 70 percent over the course of 2022.
    • Lesotho: High global food and fuel prices are driving price transmission between South Africa and Lesotho, which imports most of its goods from South Africa. High prices, coupled with a below-average harvest in 2022 and reduced household income from livestock production and remittances, are contributing to food consumption gaps among poor households in parts of the country. Food inflation reached 10.3 percent in December and, as of December, maize meal and wheat flour prices were around 40-45 percent above the five-year average. Additionally, high fertilizer, seed, and fuel prices have led to declines in area planted for the 2023 harvest, especially in the southern lowlands.
    • Rwanda: The availability of locally produced crops is supporting normal food security across most of Rwanda; however, high food, fuel, and agricultural input prices are driving a reduction in food availability and access among poor subsistence farming households in parts of western and southern Rwanda. A decline in household income linked to a slowdown in economic growth and increase in unemployment levels is also contributing to elevated food insecurity in urban areas. In January, annual food inflation remained high at 57.3 percent. In addition, the increased cost of agricultural inputs (fertilizer and seeds) is limiting planted acreage and crop yields among subsistence farmers, and resulted in a reduction in agricultural labor income among poor households.
    • Nicaragua: Domestic political and economic conditions are the main factors affecting food security, exacerbated by high imported commodity prices. Annual food inflation slowed to 15.7 percent in January while headline inflation dipped to 10.92 percent. The seasonal availability of food stocks from the recent harvests and high demand for cash-crop labor is preventing substantial declines in household access to food; however, the size of the late 2022 harvests did not generate the typical level of stocks or substantial declines in food prices.
    • El Salvador: The economic impacts of the Ukraine crisis on food security in El Salvador are muted by the availability of favorable local harvests and a seasonal increase in cash-crop labor income, but high food and fuel prices are contributing to economic pressure on household access to food. Annual food inflation rates have hovered around 12 percent since November, while annual headline inflation dropped slightly to 7 percent in January; however, prices remain well above normal, constraining household purchasing power. Additionally, the size of the late 2022 harvests did not generate the typical level of stocks or substantial declines in food prices.

    Recommended citation: FEWS NET. Ukraine Targeted Analysis January 30, 2023: Ukraine Targeted Analysis, 2023.

    1

    The financial value of damages was calculated based on the cost of replacement with brand new equipment in cases where machinery was destroyed.

    2

    A marketing year begins with the start of the harvest period and concludes immediately prior to the subsequent year’s harvest.

    3

    This estimate excludes production from Crimea and other Russian-occupied areas.

    4

    Starting in 2022, the Ukrainian government only reports crop production data in unoccupied areas. In 2022, only 4.6 million hectares were harvested out of the total 6.1 million hectares planted across both occupied and unoccupied areas. If harvested hectares are used as a rough proxy for the minimum level of area planted in unoccupied areas, then the area planted in 2022 was at least 17 percent less than the area planted in 2021.

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