Highlights:
Wheat and wheat products account for one third of the average national cereal consumption in the Eastern Africa Region, with highest consumption per capita in Djibouti, Eritrea and Sudan. Yet, 84 percent of wheat demand in the region is met by imports. The invasion of Ukraine has already had a negative impact on global wheat prices, which have jumped to record high in Q1 2022, comparable to levels witnessed during the 2008 global financial crisis. In addition, Ukraine and Russia could impose export tariffs or trade restrictions including export bans on wheat to support domestic food needs, should the crisis prolong.
Considering the size of wheat demand and over-reliance on imports from Russia and Ukraine, Sudan is likely to be more severely affected by the fallout of the ongoing conflict; followed by Kenya and Ethiopia. Other countries in the region are also likely to be either directly affected (through increased prices of wheat-based products) or indirectly affected (consumption of substitute products, resulting into increase in prices of other cereals).
In addition, Ethiopia, Sudan and South Sudan are more likely to be affected by possible wheat prices shocks as they are already facing internal socio-economic and climatic shocks–which have already led to high-food prices.
Analysts have projected that disruptions to oil flows from Russia has the potential to push global oil prices to USD120 per barrel. The current State-backed fuel subsidies aimed at cushioning consumers (e.g. in Kenya) and price controls (Djibouti, South-Sudan) are highly unlikely to keep pace with short-term pump price inflation.
Source: World Food Programme