An article by the US National Interest website reported that the war in Ukraine has already started to set fire to the Middle East, noting that the government in Iran announced that it would reduce wheat subsidies amid rising global prices.

The article, written by Saeed Qaseminejad, senior adviser on Iran and financial economics at the Washington-based Institute for Defense of Democracies, stated that the announcement sparked a wave of protests that quickly turned into political demonstrations, with demonstrators calling for the overthrow of the regime in Tehran.

He said Iran is not the only country in the hot and dry Middle East that feels threatened by the turmoil in global wheat markets.

In 2020, Russia and Ukraine provided 43% of the wheat imported by the Middle East and North Africa, compared to only 19% in 2008. The region also relies heavily on Russian and Ukrainian maize.

Wheat prices and the Arab Spring

He pointed out that wheat prices increased 3 separate times between 2008 and 2012, saying that they contributed to the Arab Spring revolutions.


He explained that there are many ways in which the war in Ukraine has destabilized the wheat and corn markets, of which Russia and Ukraine are major exporters: First, the war makes it difficult or impossible for Ukraine to grow and harvest crops.

Second, the Russian blockade of Ukraine's ports on the Black Sea has cut off the main route for exports.

Third, sanctions on Russian oil and gas could threaten supply and increase the cost of fertilizer and fuel, as well as the price of seeds.

Fourth, while there are no sanctions on Russian grain, financial sanctions make doing business with Russia more difficult, and managing transportation more difficult.

The writer pointed out that wheat and corn prices jumped in 2021 and 2022 to their highest level since 2008, adding that if the war continues, a supply shock may occur late this year and early next year.

He said that after the sharp rises associated with the Arab Spring, prices were on a downward trend until 2020, then the Corona epidemic led to loose monetary policies and supply chain problems that led to upward pressure on prices.

Finally, the war in Ukraine set an already hot wheat and corn market on fire.

sensitive to price shocks

He stated that the MENA region suffers from water stress and has only 2% of the world's renewable water resources, which makes it highly sensitive to droughts, and as a result, its countries are highly dependent on grain imports (it imports up to 45% of its wheat from Russia and Ukraine It is very sensitive to price shocks.

He said that Egypt, Algeria and Morocco were among the top 15 importers of wheat in 2020, and Egypt, Algeria and Iran were among the top 15 importers of corn in 2020.

The writer mentioned that Lebanon, Libya, Tunisia and Yemen are already suffering from political instability and economic turmoil, and they all bought 50% or more of imported wheat from Ukraine and Russia between 2018 and 2020.

Libya and Tunisia each obtained half or more of their maize needs from Ukraine and Russia.

Morocco, Jordan, Iran and Syria are somewhat less exposed, buying between 25 and 50 percent of their wheat from Russia and Ukraine.