Analysts Assess Impact of Russia-Ukraine War on Food Security in Azerbaijan
By Tapdig Farhadoglu, Dilshad Aliyarli April 26, 2022
With the backdrop of Russia's war in Ukraine, an increasing number of experts are warning of worldwide food shortages. Some experts say the war will put long-term food security in jeopardy. Azerbaijan's food supply relies heavily on imports from Russia and Ukraine.
Azerbaijan imported goods worth roughly $470 million from Ukraine and $2.74 billion from Russia in 2021. Tobacco, food supplies, and medications are the most common commodities traded between Azerbaijan and Ukraine.
Last year, Azerbaijan imported nearly $300 million of wheat from Russia, as well as timber materials worth $100 million and vegetable oils worth $46 million, according to the State Statistical Committee of the Republic of Azerbaijan.
Those three items account for more than 20% of imported goods from Russia.
Officials and analysts agree that basic food prices have risen dramatically during the Russia-Ukraine conflict.
Prime Minister Ali Asadov stated at a government meeting on April 12 that food inflation had climbed 18% in the past three months.
"Our overall inflation rate is 12.2% for three months. Inflated food products account for more than 60% of inflation," Asadov said.
According to the prime minister, prices have reached an all-time high as a result of the Ukraine-Russia conflict, particularly for grain.
"Given the leading role of Ukraine and Russia in world grain production, and the difficulties that Ukraine will face this year, we are increasing these reserves," he said.
According to economist Vahid Maharramli, the Russia-Ukraine conflict could jeopardize Azerbaijan's food security. He said Russia is the country's largest source of wheat imports, accounting for 90% of overall imports.
"Azerbaijan imports 1.35 million tons of wheat from Russia per year. We import other products, such as butter and dairy products, mainly from Ukraine," Maharramli said.
According to Maharramli, Azerbaijan would not be able to replace Russian and Ukrainian products with imports from other countries in the near future.
"Because each country, first of all, tries to satisfy its needs. Countries are also considering building food stockpiles, unlike in previous years. Because everyone is trying to hedge against food shortages," he said.
Maharramli added that the country's food prices have recently surged. If the government does not take preventive measures, he believes that providing food to low-income families will become increasingly difficult.
"On average, we can say that the population of Azerbaijan spends 50% of their income on food. People with higher incomes spend 20% of their income on food and medicine, while people with low incomes spend up to 90% on food and medicine," he said.
Maharramli added that 3 million unemployed people live in the country, according to the estimates. For the most part, they rely on relatives and friends to provide their basic needs. He said that prices for food and services, such as housing and communal amenities, had risen in the previous year.
"All this creates problems in providing food to low-income families," he added.
Rufat Guliyev, a member of the Azerbaijani parliament, told VOA that the Azerbaijani government is exploring alternate food sources.
"This year, more grain will be imported from Kazakhstan. By the end of this year, our country has strategic reserves. We can use it. I do not believe in further price increases. But the Russian-Ukrainian war will affect Azerbaijan's food supply," Guliyev said.
Guliyev added that imported goods are to blame for most of the country's inflation.
"If the law of supply and demand is violated, of course, this affects prices. Today, the government of Azerbaijan unequivocally prioritizes the issue of increasing domestic production. There are enough opportunities for small businesses. Reforms will start with the central bank. Interest rates on loans will also decrease," he said.
Azerbaijan is transitioning from extensive to intensive development, according to Guliyev.
This story was originated in the Azerbaijani service.
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