- The head of Ukraine’s largest food producer, MHP, says the food crisis could turn catastrophic.
- “I don’t see a clear path to the light in the tunnel,” John Rich, executive chairman of MHP, told Insider.
- Without the opening of Ukraine’s blocked ports, millions of tons of the MHP crop could go to waste.
- For more stories, visit Business Insider.
Catastrophe. Apocalypse. These are the words on the tip of John Rich’s tongue as he oversees operations for MHP, Ukraine’s largest food producer, as the war continues in the country.
The World Food Program (WFP) – the United Nations’ food aid agency – has not gone so far as to say the situation could be apocalyptic, but it does believe the effect of the war, especially because of limited exports of key grains, could could mean a “hunger catastrophe”. According to an April WFP report, up to 323 million people could become food insecure as a result of the conflict by 2022, compared to a pre-war baseline of 276 million people.
“I don’t see a clear path to the light in the tunnel,” Rich, MHP’s executive chairman, told Insider, adding that without a solution to the food crisis, he believes “hundreds of millions of people around the planet” will be affected.
The solution is obvious, but complicated by geopolitical struggles. Ukraine’s ports along the Black Sea have been blocked by Russia, strewn with mines and otherwise unsafe to proceed due to fighting. But they are essential to ensuring the flow of Ukrainian raw materials that feed large parts of the world, including supplying 12% and 17% of the world’s wheat and maize stocks.
Rich is at the helm of the crisis and has echoed the rallying cry of global food security experts since the start of the conflict: open the ports. He fears that the production of key grains in his company could otherwise be lost.
The London-listed company produces poultry and grows grain. The workers have adapted to the “new normal” of delivering essential food supplies in a war zone, with missiles flying overhead.
“We will not export much from Ukraine this year,” said the chairman. “God knows how long it will take us because it’s extremely difficult.”
In fact, 45 million tons of this year’s MHP crop could be in storage, a crop that would normally “feed the Middle East, North Africa, Turkey, everyone,” Rich said.
According to Rich, certain crops oxidize faster than others, such as sunflower seeds, a crop stranded in Ukraine’s seaports, including its largest, the port of Odessa.
Spoiled crops are a concern because MHP’s crop production has not been affected by the war, Rich said. This is because most of the company’s operations take place in western and southwestern Ukraine, where not much fighting has taken place. In addition, MHP had already bought its input for the 2022 season and stored it in 2021.
MHP is therefore on track to produce a quarter of a million tons of wheat this summer. But a combination of difficulties in exporting and lower consumption in Ukraine as a result of fleeing residents means that much of it could end up in storage.
On May 26, a senior Russian government official said the Kremlin would allow ships carrying food to leave Ukrainian ports in exchange for sanctions being lifted, according to Interfax news agency. Ukraine called the suggestion “clear blackmail,” according to CNN.
Now that ports have been blocked, exports from Ukraine will have to come by rail to alleviate the growing food crisis. According to Rich, that solution poses a number of challenges due to the changing track gauge between Ukraine and the EU. It will also be slow due to customs processes and sanitary and veterinary checks between borders, he added.
The pandemic and China’s subsequent zero-covid policies, as well as climate change that devastated crops by droughts and storms around the world, already threatened food security for millions of people before the war, Rich said.
“The war was really what broke the camel,” he added.