"Mistakes of countries like the United States": presidential aide Oreshkin on the causes of the global food crisis

- The West blames Russia for the current food crisis, saying that our country launched a special operation, therefore it is to blame for all the consequences.

How is the situation really?

- First you need to analyze the real facts.

There are UN statistics that show what is happening with food prices.

And if you look at this data, you will see that the prices of food did not start to rise in the last two months.

The UN food price index has risen by more than 70% over the past two years, and more than half of this increase was in the period up to February 2022.

Such drastic changes do not occur for any one reason.

It is always a combination of a number of factors that lead to a similar result.

It all started back in mid-2020, when prices began to rise not only for food, but also for raw materials and energy.

The reason for this was the mistakes of countries such as the United States - mainly the United States - in the field of monetary policy.

In two years, starting from February 2020, the United States has increased the money supply by almost 40%.

Approximately $6 trillion was printed to support the economy.

Of course, later this money spread all over the world, which started the process of rising food prices.

That was the first phase.

The second phase began in mid-2021, when Europe faced an energy crisis.

Mistakes have played a key role in this, mainly on the part of the European Commission in the field of energy policy.

I mean the excessive bet on renewable energy sources and short-term gas contracts.

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All this spurred the rise in gas prices, which to a large extent led to a drop in fertilizer production and a decrease in crop volumes.

Of course, this state of affairs also had a serious impact on food prices.

Speaking of the third phase, here we finally come to February 2022.

However, this is not about a special operation in Ukraine, but about numerous sanctions against various fertilizer producers in Belarus and Russia, sanctions against merchant ships and payments.

It hinders trade.

Russia wants to export more food and fertilizer.

Belarus also wants to increase the supply of its fertilizers abroad.

However, sanctions block access to the global market and, of course, restrict supply.

- At the moment, Western countries have already introduced more than 11 thousand sanctions against Russia.

— Yes, such is the sanctions madness.

“Nevertheless, the West calls on Russia to continue exporting fertilizers and agricultural products, but at the same time hits our carriers with sanctions.

A ban has already been introduced both on sea supplies of oil from the Russian Federation and on insurance of Russian ships.

Against this backdrop, how can the West accuse Russia of restricting supplies?

“At some stage, it became completely incomprehensible to us what was happening, because the sanctions that they announce on a weekly basis, if not daily in some cases, are simply insane.

There is no logic, no economic considerations behind this.

They hurt themselves: in some European countries, such as Estonia, the inflation rate is higher than in Russia.

The ruble has become stronger than the euro.

What they do, no one knows.

Of course, such madness in making political decisions leads, alas, to very painful consequences for the whole world, especially for countries in Africa and the Arab world.

All this is fraught with the fact that the world markets will receive less energy and food.

- Why is such a difficult situation now observed in Africa and the Middle East?

And why do they think that the West is to blame for this?

— You need to understand that the sanctions have played only a small role in addition to all the problems that have accumulated over the previous years.

The already mentioned monetary policy, the issue of money in the United States - what does it mean?

That in any case, whatever the price of food, the United States will print money and buy food for itself.

According to statistics, the level of daily calorie intake in the United States is more than 50% higher than the world average.

That is, they print money and buy up all the food.

Naturally, they take this food from those who cannot afford it, and these, of course, are poor countries in Africa and the Arab world.

In general, it must be said that, in fact, there is enough food in the world.

If countries like the United States reduce their consumption, there will be enough food for everyone.

— Speaking of who gets how much food, Western countries are now trying to take grain out of the territory of Ukraine, declaring that they are doing it for the sake of the common good.

How important are Ukrainian wheat reserves for the global food market?

— There is one interesting fact about Ukrainian grain.

Of course, everyone is talking about 20 million tons of wheat in Ukrainian warehouses, but in reality, if you look at the data of the US Department of Agriculture, there is an estimate of stocks in Ukraine not 20 million, but 6 million tons.

But one way or another, let's assume that we are talking about 20 million tons of Ukrainian wheat.

This is only 2.5% of global wheat production, which is 770 million tons per year.

In addition, wheat itself accounts for only one-fifth of the world's caloric intake.

This means that we are only talking about 0.5% or even a smaller share of global food production.

The number is very small.

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In addition, Russia is ready to export 13 million tons more than last year, covering all potential shortages.

At the same time, losses due to problems observed in India (drought, crop decline there), according to various estimates, amount to 11 million tons.

Only because of the weather in India.

That is, this is one of the many factors affecting the wheat market.

And as far as food is concerned, it's not such a big factor compared to the money supply, the energy crisis, the fertilizer crisis.

The main result of all these events, stemming from the mistakes of the people in charge of policy in the US and Europe, is today's food problems.

“According to the UN and the World Trade Organization, the number of people suffering from hunger, on the verge of starvation, over the past two years has doubled the pre-pandemic figures.

We are talking about almost 300 million people.

If the food crisis continues, what will all these people do?

- This is a very serious problem.

In Russia, for our part, we will do everything possible to bring more food to the world market.

Unlike the US, which is ramping up its imports as a net food importer and increasing the cost of buying food around the world at a rate that exceeds its export earnings, Russia will supply more and more of it.

But, unfortunately, the entire increase in our exports for this and next years will not be enough to cover all the needs of the world market.

Alas, as in the case of the previous food crisis ten years ago, people will rush after food: that is, to those countries that buy it from them - this is Europe and the United States.

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— Nevertheless, Russia limits the export of its fertilizers.

We do not want to ship them abroad?

— Russia has not introduced restrictions — it continues to export fertilizers.

We just care about meeting domestic demand.

We have kept as much fertilizer as we need in order to harvest a very rich harvest this year, which we will also supply to the global market.

So, it is very likely that we will have a record harvest of wheat, and we will be able to provide the world with this food.

In general, all measures taken by Russia in terms of fertilizers come down only to ensuring supply on the domestic market.

Everything above this volume is exported.

Looking at the numbers, you will see that Russia has not stopped supplying fertilizer abroad.

- At the same time, were there restrictions from the West?

— Yes, this has been a problem for the last couple of months, because if you do not have a dry cargo ship, if you do not have a partner who buys fertilizers, of course, it is very difficult to supply them to the world market.

Russia is ready to supply more of both food and fertilizer, but this is very problematic due to the logistics destroyed by the sanctions.

By the way, at some point, when the United States realized the problem, they lifted sanctions on Russian fertilizers.

In turn, the European Union retained these sanctions.

This is madness.

There is no logic in their steps.