The Geopolitics of Grain: Russia, War and a New Order

Abstract

Throughout the history of civilization, grains have been among the first domesticated food sources, serving as the foundation of nutrition, social life, trade, and the arts. Grains have been the cornerstone of production activities. Today, approximately 9 billion tons of plant-based production occur globally, with grains constituting 30-35% (around 3 billion tons) of this output. This product group meets a significant portion of daily caloric needs in many countries. Factors such as population growth, increased life expectancy, diversification of transportation options, greater mobility of populations, and the transition of a portion of the migrant population from producers to consumers have all influenced grain supply and demand. The critical importance of food, which has persisted since ancient times, has only grown with these rapid changes, leading to an expansion in the uses of grains. Beyond their traditional role in nutrition, grains have become valuable commodities in financial markets.

The 21st century, distinct from other periods in the historical journey of grain production, marks a time when crises have become chronic. Climate change and extreme weather events have altered the nature of production, supporting price volatility and leading to what was nearly the most widespread food crisis during the 2007-2008 period. Since then, the grain sector has become more integrated with financial markets, while simultaneously becoming more sensitive to political, economic, and social developments in major producer and exporter countries.

During this rapid transformation, the Covid-19 pandemic, which began spreading in 2020, disrupted established perceptions of food products, broke supply chains, and brought food security to the forefront of the global agenda. As the pandemic continued, the Russia-Ukraine war that erupted at the end of February 2022 marked a new turning point in grain policies. It initiated a new polarization and the construction of a new order based on energy and grain.

As of the 2023/24 period, Russia and Ukraine collectively account for 33% of the world's wheat trade, 28% of barley trade, and 16% of corn trade. Since the early 2000s, Russia has steadily increased its grain production and exports, becoming the leading wheat exporter, particularly significant for the Middle East and North Africa. The strengthened position Russia has built over the past 25 years has made global grain prices sensitive to its decisions and measures. Concerns about food crises, which have remained on the global economic agenda since the 2007-2008 crisis, have only intensified with the pandemic and the war, making food security a crucial item in national and international policy documents. The conflict between these two major exporting countries has turned grain into a political, economic, and diplomatic bargaining tool and a national security issue.

In light of these developments, this study aims to highlight the paradigm shift in global markets driven by Russia's strengthened position in the grain market, particularly evident post-war. The findings demonstrate that grains, beyond being a source of nutrition, are a significant economic and political transformative power for countries with substantial production and export potential. Today, this power is in the hands of Russia, initiating a trend towards a departure from the global market order through agriculture and food. A new order is taking shape, characterized by a shift from global to regional, the rise of protectionist policies, and the re-invitation of public intervention mechanisms into economic policies.