This is the first in our new series on wheat. A complete guide our series can be found here
Wheat is the staple food for nearly 50% of the planet – providing 20% of the global calories.
In 2007/2008 wheat prices spiked and that pushed an additional 200 million people into hunger. 2022 has seen new all-time highs in pricing – driven by drought, flood, and conflict.
Increases in food prices result in political instability and risks to national security. Food shortages are linked to riots and uprisings. This chart, from the UN, shows the link between grain prices and civil disorder – with the Arab Spring being highlighted.
Just six countries produce 60% of the entire global supply of wheat: China, Russia, India, US, France, and Ukraine. As result the global food supply , and therefore global stability, is closely linked to harvests of these countries.
All of these are facing challenges. Drought in the US; flooding in China; war in Ukraine. Climate change is impacting global harvests. In India production could be reduced by over 20% in the long term.
In March 2022 countries are already running low on food. Lebanon and Egypt are struggling with soaring prices. In countries like India, where food makes up nearly 50% of the consumer inflation index (compared to around 8% for the US) the increase in food pricing has a much bigger impact
2022 is a bad year for wheat, but it could get worse.