China-Backed Infrastructure Banks Halt Lending to Russia, Belarus Over War in Ukraine
The Asian Infrastructure Investment Bank has decided to put all activities relating to
Russia and Belarus “on hold” due to the war in
Ukraine, the China-backed institution said on March 3.
The announcement comes a day after China’s top banking regulator said the country would keep up normal trade with Russia and Ukraine amid Western sanctions.
In a
statement published on its website, the Beijing-headquartered bank said its management would do utmost to “safeguard the financial integrity, against the backdrop of the evolving economic and financial situation.”
China is the largest shareholder of the multilateral lender, with a stake of over 30 percent, according to the official website.
Given that it holds 26.5 percent of voting rights, China has veto power over major decisions, which requires a 75 percent majority.
“Under these circumstances, and in the best interests of the Bank, Management has decided that all activities relating to Russia and Belarus are on hold and under review,” read the statement.
Russia is a founding member of the AIIB, and the third-largest shareholder after China and India. Belarus and Ukraine are not members of the bank.
AIIB was proposed by the leader of the Chinese Communist Party Xi Jinping in 2013, the year that he launched the Belt and Road Initiative, a multi-continent infrastructure project which has been labeled as a vehicle used for
building up the regime’s economic and political influence worldwide.
Meanwhile, the Shanghai-headquartered New Development Bank (NDB) also
announced on Thursday that it has put new transactions in Russia “on hold,” citing “unfolding uncertainties and restrictions.”
NDB was established by China, Russia, India, Brazil, and South Africa in 2014 to fund infrastructure projects, a similar purpose to the AIIB.
The move by the two banks follows a spate of Western sanctions on Russia in response to the invasion. The United States, European Union, and other Western allies have cut key Russian banks out of an international payments system known as
SWIFT and limited Russia’s central bank’s ability to draw over $600 billion in foreign currency reserves.
The response from the communist regime in Beijing has come under growing scrutiny, given its deepening ties with Moscow.
Bilateral trade surged nearly 36 percent in 2021 to record $146.9 billion, according to China’s official customs data. The two neighboring countries aim to boost it to $240 billion in 2024, Xi said during the summit with Russian President Vladimir Putin in Beijing earlier this month.
Guo Shuqing, the head of China Banking and Insurance Regulatory Commission, said on Wednesday that the country
opposed unilateral sanctions and wouldn’t join Western nations’ restrictions.
The Chinese regime hasn’t condemned Russia’s attack and
declined to call it an invasion.
Disclosures on AIIB’s website shows the institution in 2019 and 2020 approved two projects in Russia worth $800 million. The bank
announced last October it was due to hold its annual meeting in Russia this year, though no specific date provided.
China Changed Supply Chain Strategy With Russia 3 Months Ahead of Ukraine Invasion, Suggesting It Had Foreknowledge: Analyst
Around three months ago, China changed how it ordered goods from
Russia in a way that would insulate Beijing in the event of Western sanctions on Moscow, according to a supply chain analyst citing insider information.
This move suggested that China had foreknowledge of Russia’s plan to invade
Ukraine, and had made contingencies to ensure it could still import Russian commodities amid sanctions, he said.
In about November or December, China began buying all of their Russia-origin cargoes—grains,
crude oil, and petrochemical products—on a “free on board origin” basis, meaning that China would hold claim to the goods as soon as they were loaded onto the ship, said Ross Kennedy, founder of Fortis Analysis.
This an unusual choice in international trade, Kennedy told NTD, an affiliate of The Epoch Times, on March 3.
In large shipments by sea, sellers, rather than buyers, would commonly assume responsibility for the goods until they are delivered to the purchaser, he said. They also typically cover the cost of shipping and insurance, and warrant that the goods will safely reach the destination.
“Now, what you’re seeing is the buyer stepping up and saying we’re going to take the risk,” he said in the interview.
“And the reason you would see that happening is because there is a fear that sanctions on products coming from a certain country, in this case, Russia, would impact those country’s ability to buy those products.”
The switch indicated to Kennedy that China’s authorities have, “at least for some amount of time, been certainly aware of Russia’s plans with regard to Ukraine—if not outright complicit in it.”
The growing friendship between Russia and China has
fueled questions about what role Beijing could have played leading up to the
invasion of Ukraine.
Worried about Russian President Vladimir Putin mounting a “reckless invasion,” White House officials had engaged China in advance in the hopes it could help avert a war, but China had declined, a top U.S. policy advisor recently said in a panel event.
Instead, senior Chinese officials
reportedly asked Russia to postpone making a military move until the end of the Beijing Winter Olympics.
On Feb. 21, one day after the Olympics concluded, Putin deployed troops to two breakaway regions in the eastern part of Ukraine. The Russian military officially launched the attack three days later.
About
1.2 million people have fled the war in Ukraine, a United Nations official said on Friday. The agency has recorded 1,006 casualties as of March 3, including 331 deaths and 675 injuries, but believes that the real toll is much higher.
Most of the victims were killed by explosives such as multi-launch rocket systems and missile and airstrikes, the office said.
Most Americans Oppose Sending US Troops to Ukraine to Fight Russia: Polls
Most Americans don’t support the idea of sending U.S. troops to
Ukraine to help Ukrainian forces fight against Russian personnel, according to surveys.
Just 19 percent of respondents to an Economist/YouGov
poll said sending U.S. soldiers to Ukraine is a good idea, compared to 54 percent who thought it was a bad idea. The rest weren’t sure.
More respondents, 33 percent, said it was a good idea to send soldiers to Ukraine “to provide help,” but not to fight Russian soldiers.
Sixty-three percent of respondents to a Reuters/Ipsos poll (
pdf) said the United States should not send troops to Ukraine to help defend Ukraine from the Russians. The rest said troops should be sent.
The same division was seen when asked if the United States should conduct airstrikes against Russian forces, and a plurality of respondents to the YouGov survey opposed the United States conducting drone strikes against the Russians.
A majority of respondents to a poll (
pdf) from SSRS for CNN also opposed the United States taking military action to stop
Russia.
President Joe Biden has vowed not to send U.S. troops to Ukraine in the wake of the Feb. 24 Russian invasion.
“Let me be clear: Our forces are not engaged and will not engage in the conflict with Russian forces in Ukraine,” the Democrat said during his State of the Union speech.
Biden’s administration has sent troops to Europe and the president has committed to joining the fight if Russia attacks any North Atlantic Treaty Organization (NATO) allies.
The administration has also shipped weapons and other military aid to Ukraine to help Ukrainian troops fight back against the invasion.
According to the surveys, most Americans support helping Ukraine.
A plurality of respondents told YouGov that it would be a good idea to impose a no-fly zone over Ukraine, even though many experts have warned that would mean the United States had joined the war on the Ukrainian side.
Many respondents to the polls support providing weapons to Ukraine and imposing additional sanctions against Russia. Nearly half of respondents to YouGov said Ukraine should be allowed to join NATO; about a third were unsure.
A minority of U.S. lawmakers say the United States should impose a no-fly zone or otherwise get more directly involved in the war, but most have said the current level of involvement is appropriate.
The YouGov poll was conducted from Feb. 26 to March 1 and had 1,500 respondents and a margin of error of about 3 percent. The Ipsos survey was conducted from Feb. 28 through March 1, had a sample of 1,005 adults, and had a margin of sampling error of 3.8 percent. The SSRS survey was conducted on Feb. 25 and Feb. 26, with a sample of 1,001 respondents. It had a margin of sampling error of about 4 percent.
Other countries have also opposed so far sending their troops to Ukraine, including 40 percent of British respondents to a poll by Redfield and Winton.
Chinese Communist Party Wants Isolated Russia to Become Dependent on Beijing: Expert
The Chinese Communist Party (
CCP) hopes to capitalize on
Russia’s current isolation by rendering it more dependent on Beijing, according to one expert.
To achieve that goal, however, Beijing will need to provide Russia with assistance that flies under the radar of Western nations, which has leveled a slew of
sanctions on Moscow over its invasion of Ukraine.
“It’s not that
China isn’t willing to help Russia,” said David Goldman, deputy editor of the Asia Times during a recent interview with “
China in Focus,” a program of The Epoch Times’ affiliate NTD. “China doesn’t want to help Russia in a way that attracts the anger of the West at this point and makes its own situation more difficult.”
“China will take no overt measures to help Russia evade the sanctions regime, but in many quiet and undetectable ways. China will help Russia sell oil, sell its exports, and so forth,” he added.
Goldman’s comments touch upon the growing question of just how far the CCP might be willing to go to provide Russia with relief from Western sanctions in the wake of Russian President Vladamir
Putin’s
war on Ukraine.
CCP leader
Xi Jinping welcomed Putin to the Beijing Olympics in early February, where the two announced a partnership between their respective nations that would know “
no limits.”
As it turns out, “no limits” may be too strong a phrase, however, and initial signs of strain between the two appear to be beginning to show. Notable among them: China’s reticence to provide any overt support to Russia.
Western nations led the most comprehensive coordinated sanctions in history against Russia over the last week, in an effort to punish the regime for its war of aggression in eastern Europe. How far China will go to ease the effects of those sanctions on its partner is an
open question.
Analysts note that China is unlikely to be comfortable drawing international attention for its partnership given that Russia is now facing an international investigation following
allegations that it is committing war crimes and crimes against humanity in Ukraine, including the bombing of schools and hospitals.
Nevertheless, the CCP
refuses to label Russia’s invasion of Ukraine as an “invasion,” and within mainland China is actively
censoring coverage of the war that is critical of the conflict and Putin.
Though the CCP is not currently giving overt support to Russia, it is providing a level of cover by refusing to participate in Western sanctions. Retired Air Force Brigadier General Robert Spalding
noted the Russian war effort was dependent on the continued “tacit approval” of the CCP.
Indeed, just last month, the CCP signed an energy deal with Russia to build a new pipeline that will deliver 1.8 trillion cubic feet of natural gas to China from Russia every year.
At the onset of the war, the CCP lifted wheat import sanctions on Russia, providing Moscow with increased cashflow and Beijing with a vital product amid its ongoing food shortages.
Since then, the CCP’s financial regulator
announced that it would not join in any of the West’s financial sanctions on Russia, claiming them to be without legal merit.
“We will not join such sanctions,” said Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission on March 2. “We will keep normal economic, trade, and financial exchanges with all the relevant parties.”
Goldman said that the deepening China-Russia partnership would be a “formidable” strategic threat to the West. Despite what Russia may think, however, the CCP has every intention of dominating that partnership, and it is
using Western sanctions to do so.
“If you read the Beijing media, their belief is that the consequence will be that Putin turns towards the east and that Russia will become overwhelmed or dependent on trade with China,” Goldman said. “China will be the main buyer of oil and raw materials, and the main provider of high-tech products.”
“The Western sanctions cut Russia off from many high technology products, including computer chips, which are the building blocks of a modern economy. China certainly can be an alternative source from him.”
As part of this effort, Goldman warned that the CCP could attempt to subvert the Western ban on Russia’s participation in
SWIFT, the global messaging system that enables bank transactions.
To achieve this, he said, the CCP could use its own systems as a replacement to SWIFT that was based on local currencies rather than the dollar.
“In theory, the Chinese international payment system could be used as an alternative to SWIFT and, in fact, international trade finance transactions could be financed in [renminbi] instead of dollars, presuming that Chinese banks are willing to do that financing,” Goldman said.
“This is not a technical issue … It’s a political issue. China is very reluctant to appear as the helper of Russia when the entire West is determined to punish Russia. China is clearly afraid that sanctions might be applied to Chinese banks were they to step in and help Russia to evade the Western sanctions.”
Pro-Russia Propaganda Proliferates in China as Moscow’s Isolation Grows
If
Russia needs to find some support amid the piling Western condemnation for its invasion of
Ukraine, all it takes is a browse of the Chinese internet.
In China’s tightly controlled online space, pro-
Moscow sentiment dominates. Celebrities have been chastised for voicing sympathy for Ukraine. Hawkish Russian remarks are cheered. And some Chinese users have described Russian President Vladimir Putin as a hero standing up to the West.
The enthusiasm has extended to e-commerce. Some Chinese have flocked to a Russian-owned online store that was said to be endorsed by the Russian Embassy in China, clearing shelves for most of its products from chocolates, to wafers and vodka.
“Every chocolate is a bullet fired at the nazis, ypa!” wrote one buyer in the store’s review section, in an apparent reference to Putin’s claim that he wanted to “denazify” the country in justifying the invasion.
The outlet, known as the Russian National Pavilion, saw its online following soar three fold within a day, and received a total of 50,000 orders placed since Feb. 28, according to Chinese media reports. By Wednesday, a video has popped up from Sergey Batsev, an ambassador to China for the Russian nonprofit Business Russia, thanking “Chinese friends” for supporting his country in such “difficult times.”
“During this complicated and ever-changing international situation, we have seen our old Chinese friends’ camaraderie,” he said. “ˇThere’s an old Chinese saying that a goose feather sent from far away conveys profound affections. We will cherish this deep friendship in our hearts.”
Meanwhile, nationalist voices on social media have cheered a strong Russia-China partnership.
“I said long ago that with China acting as a shield for Russia, whatever Western sanctions will dissolve to nothing,” wrote a nationalist Chinese scholar on Weibo, China’s Twitter-equivalent. The post attached photos that appeared to show long lines of shoppers inside a Russian store in northern China. He had visited the website of the Russian National Pavilion twice without finding anything available to buy, he said.
It’s unclear to what extent these viewpoints reflect the broader public sentiment in China due to Beijing’s heavy censorship that has silenced voices from the other side.
Several Chinese actors have been censured on Weibo after posting pro-Ukraine remarks. Social media posts by prominent Chinese scholars opposing Russia’s invasion were taken offline, as with suggestions of Russia being on the losing end. A video by a Ukrainian vlogger popular in China, entreating her fans in Mandarin to “respect lives” and “not take war as a joke,” was largely erased from the Chinese internet and only viewable on Twitter, a platform banned in China.
When the English Premier League announced plans to show solidarity with Ukraine this weekend by having club captains wear armbands in colors of the Ukraine flag, blue and yellow, and displaying on stadium screens the slogan “Football Stands Together” printed on a Ukraine flag, the league’s Chinese broadcast partner reacted by
pulling the scheduled coverage.
Fostering a pro-Russian mood, or at least the impression of it, appears to be Beijing’s designs from the beginning.
Two days before Putin started bombing Ukraine,
leaked censorship rules showed Chinese state media had been told to ensure that its content not appear anti-Russia or pro-Western.
As the Chinese regime has
refused to use the word “invasion” to characterize Russia’s attack, the word is taboo in coverage across Chinese media. When a reference is necessary, media outlets have adopted Moscow’s descriptor of “special military operation,” or used the vague phrase “the current situation.”
In recent press conferences and public statements, Chinese officials have taken an awkward line of refusing to open back either side. They have, simultaneously: refused to denounce Russia’s attack, recognized that Russia has legitimate security concerns, maintained that all countries’ sovereignty should be respected,
called for a peaceful settlement to the crisis, and
blamed the United States for inflaming the prospect of war.
But its propaganda machinery has taken on a more fiery tone.
While most media coverage in the country is focused on the Beijing Paralympics, the relatively few Chinese state media reports on the crisis have played down criticism of Russia. The hashtag “multiple countries refuse to sanction Russia,” pushed by nationalist tabloid Global Times, got 120 million views in a day on Weibo.
"Russians, please aim your bullets more accurately,” a reporter from the Chinese Communist Party-owned newspaper, Jinhua News, wrote in a post upon learning that 70 Japanese have volunteered to join the Ukrainian army.
Crude jokes online about welcoming beautiful Ukrainian women refugees to China and pro-Russia remarks have made lives more difficult for Chinese nationals stuck in Ukraine. Some said they were threatened by angry Ukrainians when going to supermarkets.
Beijing’s stance did not go unnoticed in Russia.
Maria Zakharova, the country’s foreign ministry spokesperson, on Thursday said they “appreciate Beijing’s impartial and unbiased vision of the Ukrainian issue.”
China “avoids being misled by Western ploys,” she told a news briefing.
US Company Taking Aim at Russia Invasion With 1 Million Bullets For Ukraine
One million American-made bullets will soon be in the hands of Ukrainian soldiers thanks to an Arizona company and a legendary NASCAR team owner.
Fred Wagenhals, the owner of the Scottsdale-based Ammo in Arizona, told The Epoch Times that it is his honor to supply Ukrainian soldiers with the ammunition—enough he said to “arm 34,000 AK-47s with a clip of 30 rounds in each gun.”
With some irony, the AK-47 assault rifle is known in Russia and
Ukraine as the Kalashnikov and was developed in the Soviet Union by a Russian small arms designer.
“As a company, we like freedom. We believe in democracy,” Wagenhals told The Epoch Times, “Because of the Second Amendment, you can’t land on one our shores and try to take over this country because there are too many guns and too much ammunition.”
In likening Russia’s attack on Ukraine to the Vietnam War, Wiggenhals added, “you can’t just go into another country and take it over like that.”
Ammo. is the fifth-largest U.S. maker of ammunition and the parent company of GunBroker.com, the largest online marketplace for firearms.
While he couldn’t reveal all the details about getting the ammunition to the soldiers, Wagenhals told The Epoch Times his shipment is already in Europe and expects the bullets to be distributed to Ukraine’s ground forces by this weekend.
The idea to send it came from his good friend Richard Childress who serves on Ammo’s board of directors. To race car fans, Childress’ name will be immediately recognizable.
His NASCAR team Richard Childress Racing (RCR) is a six-time winner of the Cup Series, all with fabled race car driver Dale Earnhardt, and a three-time winner of the Daytona 500.
In an interview with The Epoch Times, Childress said he was inspired by Ukraine President Voldomyr Zelinsky’s response to President Joe Biden’s offer to fly him out of his war-torn country during the ongoing Russian attack there.
Putin a ‘Schoolyard Bully’
“I need ammunition, not a ride,” Zelinsky said in a heroic battle stance broadcasted around the world.
“It’s an inhumane thing that’s going on right now from Russia.”
Childress told The Epoch Times, “We got to help them and they need help bad right now.”
He likened Putin to a “schoolyard bully” who is serving his own self-interests.
Ammo joins with a number of countries that have sent ammunition and weaponry including the United States.
Last week, the Biden administration reported that it had sent anti-aircraft missiles as well as firearms and ammunition to Ukraine and Secretary of State Antony Blinken announced the United States was providing $54 million in what he called “humanitarian assistance to those affected by Russia’s further invasion.”
On Mar. 2, the House overwhelmingly passed a bill calling for “additional and immediate defensive security” by the U.S. to Ukraine. It also called for a ceasefire and full withdrawal of Russian forces.
The bill, titled HR 956, was passed with a 426-3 vote with only three Republicans dissenting, one of them being Wigenhall’s own Congressman Arizona Republican Paul Gosar.
Gosar tweeted that while he supported Ukrainians, he found the resolution to be potentially dangerous to Americans.
“I will not send constituents to die in another unconstitutional war with no U.S. national security interest,” Gosar tweeted.
Former US Paratrooper Joins Fight
In addition to the proposed resolution and existing funding, the Biden administration has also asked Congress to approve $6.4 billion to
support a U.S. response to Russia’s attack on Ukraine.
Wiggenhals told The Epoch Times that he feels the United States and other countries haven’t done enough to help Ukraine and strongly believes NATO forces should deploy forces to help Ukrainians.
On Tuesday, a former U.S. paratrooper from the 101st Airborne Division who has been living in Ukraine, told Fox News in a live TV
interview, that he has decided to fight along with the Ukrainian soldiers out of a “moral obligation.”
The U.S. combat veteran, who said he has helped train Ukrainian civilians in combat, called Ukraine some of the best people in the world “as good as any of our friends and allies of America.”
He also called upon help from the United States noting that historically American presidents have always been an arsenal of democracy to their European allies.
“This is another epic time in history and Americans need to show military leadership and courage and stand with their European allies and brothers.”
Wiggenhals, a die-in-the-wool Republican, believes Putin is striking now because he recognizes he has a rare window to escape punishment from the largest military forces in the world—being the United States—because he knows the current administration won’t use it to stop him.
It is one of a myriad of opinions among conservatives camps about the Russian attacks on Ukraine with others blaming Ukraine for defying Putin’s historic opposition to bringing NATO closer to western borders.
Many fear that any aggressive allying by world forces will bring on a war that could lead to a nuclear holocaust.
Flood of Support
Wigenhals and Childress both said they have received support from several U.S. lawmakers, including Congresswoman Mary Miller of Illinois and Indiana Congresswoman Victoria Spartz, who has been especially outspoken against Russia’s attack on Ukraine.
Spartz and Wigenhals could not be reached for comment by The Epoch Times.
According to Childress, when they ran into some obstacles in transporting the donated ammunition to Ukraine, Spartz commented “she would carry it to Ukraine herself if need be.”
Miller, in a series of recent tweets on Russia’s invasion, has been especially critical of the Biden administration, stating “none of this would be happening if President [Donald] Trump was still in the White House.”
In a recent press release, Miller blamed the Green New Deal, a largely-Democratic supported public policy under which the United States continues to buy about 10 percent of its oil from Russia instead of tapping into America’s oil reserves.
Wagenhals told The Epoch Times that since announcing the ammunition donation on the company’s website he has received a flood of support and offers of financial support from shareholders, customers, and complete strangers from around the world who back sending bullets to Ukraine.
One businessman, he said, called to send him a check for $25,000 to help pay for the ammunition he’s sending to Ukraine’s armed forces.
London Stock Exchange Suspends More Trade In Russia Stocks, As Insurers Pull Coverage Over Ukraine
The London Stock Exchange (LSE) on Mar. 4, suspended trading on a second round of Russian stocks, because of continuing market deterioration and as some insurers withdrew coverage from exporters due to increasing sanctions over the Russian invasion of Ukraine.
The LSE had earlier suspended trading on Mar. 3 for 27 Russian companies, to prevent investors both buying and selling Russian securities in and out of the country.
Western banks, investors, and insurers have in recent days have been pulling their investments from Russia and halting the provision of services, as more sanctions were placed on Moscow.
The governments of the UK, the European Union, and the United States are continuing to roll out more financial sanctions on Russia to prevent its companies from accessing Western markets.
Global depositary receipts (GDRs) which represent shares in a foreign company, were no longer accepted for eight Russian stocks including Sistema, Etalon Group, and Magnit, preventing them from trading on the LSE.
The trading authorities said that it was acting to “maintain orderly markets,” amid mass selling of Russian stocks and “ongoing deterioration of market conditions,” as foreign investors cut ties with the country.
High-profile Russian banks, such as Sberbank, and major companies like Evraz, Gazprom, En+, and Rosneft were also penalized by the trading suspensions in London.
There are currently no Russian securities trading on the LSE following the move.
“This captures all Russian GDRs on our markets,” said a London Exchange spokesperson.
The LSE followed the lead of the Deutsche Boerse AG in Germany, which shut its doors earlier in the week to Russian securities listed on its market due to the sanctions.
The ability of investors to trade Russian stocks is further limited by a decision from the Russian Central Bank to keep the country’s stock market largely closed for the fifth day in a row.
Trade credit insurers, who provide a financial safety net for exports and imports, are pulling back from covering businesses that export to Ukraine and Russia given the risks of sanctions, high claims, or missed payments.
The move in the nearly $3 trillion global market is expected to add pressure on Russia’s weakened economy.
The UK-based Institute of Directors and the European Confederation of Directors’ Associations urged their nationals to quit Russian boards, saying it was “no longer tenable” for them to remain and adding that any directors of Belarusian firms should also quit.
European Union officials are also examining whether to curb Russian influence and access to finance at the International Monetary Fund following the Ukraine invasion.
The United States is expected to continue with similar multilateral sanctions to target the wealth of Russian oligarchs as part of its campaign to pressure the Kremlin.
Some investors are buying into devalued funds linked to Russia, seeing current distressed levels as a potentially cheap way to acquire Russian assets if the crisis subsides.
However, the majority of big investors are rushing to divest themselves of their now worthless Russian assets as fast as possible, as future business with Moscow appears dormant for now.
World Bank Worried About Global Food Supply and Increasing Prices as War Rages in Major Exporter Ukraine
The Russian incursion into Ukraine is a “catastrophe” for the world, said the president of the
World Bank, David Malpass, while warning about the negative impact of the war on global food supplies, prices, and further supply chain crunches.
Stressing that his biggest concern was the “pure loss of human lives,” Malpass pointed out that the Ukraine war comes at a “bad time” as the world is grappling with rising inflation. The economic fallout stretches beyond the borders of Ukraine, with the rising energy prices and inflation particularly hitting the poorest the most, he told
BBC.
The invasion has pushed up food prices, which is a “very real consideration” for those living in poor nations, Malpass said while adding that both Ukraine and Russia are some of the largest producers of food.
Combined together, the two nations account for 19 percent of global corn
supply, 29 percent of the world’s wheat exports, and 80 percent of worldwide sunflower oil exports. Around 70 percent of Russian wheat exports last year went to the Middle Eastern and African nations.
Fourteen countries currently depend on Ukraine for over 10 percent of their wheat consumption, with Lebanon importing around half of its wheat from the country. Libya imports 43 percent, followed by Malaysia and Indonesia with 28 percent each.
Ukraine’s supplies have been blocked as ports are shut down because of the conflict. Russian supplies are now restricted due to the western sanctions which make it harder for countries to buy from Moscow. “There’s no way to adjust quickly enough to the loss of supply from Ukraine and from Russia, and so that adds to prices,” Malpass said.
The disruption in Russian energy supplies is also concerning, the World Bank president said. The situation is particularly problematic for Western Europe, Malpass noted as he criticized the region’s governments for neglecting “other aspects” of generating electricity.
Roughly 39 percent of the European Union’s electricity comes from fossil fuel-burning power stations. Russia accounts for around 40 percent of the EU’s natural gas imports and about a quarter of its oil imports. Rising energy prices will push up food prices, increasing supply chain disruptions.
A decline in inventories has complicated the issue. For instance, stocks of wheat among major exporters like Russia, Ukraine, Canada, EU, Australia, United States, Kazakhstan, and Argentine are expected to fall to a nine-year low for the 2021/22 season according to the International Grains Council (ICG).
Inventories from these eight nations make up 20 percent of global inventories. Excluding Russia and Ukraine, the rest of the exporters only account for 16 percent of global wheat stocks which is just enough to feed the world for less than 21 days. Wheat futures are up by around 40 percent in 2022.
There are worries that the war will prevent many farmers in Ukraine and Russia from planting crops for the upcoming spring season, which can also negatively affect food availability.
