Sikandra Kurdi IFPRI-AMIS SEMINAR SERIES Ukraine One Year Later: the impact of the war on agricultural markets and food security Co-organized by IFPRI and Agricultural Market Information System (AMIS) MAR 8, 2023 - 9:00 TO 10:30AM EST

1. Impacts of Ukraine Crisis on
Household Consumption in
Yemen and Egypt
Sikandra Kurdi
March 8, 2023

2. Yemen

3. • Wheat import dependence growing
since 1970s
• Civil war since 2015 has further
reduced domestic grain production
• Prior to Ukraine invasion:
• 46% of calories from wheat with
Ukraine and Russia as major
source
• 26% of wheat imports via WFP
for humanitarian distribution
• Majority of the remainder by
private sector
Dependence on wheat imports

4. • Shift to importing from India (until
export ban) and European Union
• 5 shipments (plus one pending)
through the Black Sea initiative total
of 205k tons
• Importers struggle with high costs
and lack of capital
• 16-fold increase in price of insurance for
commercial shipments
• High fuel prices and shortages within Yemen
• Rationing of foreign exchange by Central
Bank
• Challenges with financing due to uncertainty
about international financial sanctions
Impact of the Ukraine war on imports

5. • As of early 2023, entire country in IPC
phase 3 or 4 with many governorates
only avoiding worse condition due to
food distribution
• More than half of Yemeni households
receive some form of food aid
• WFP food distribution rations cut to
45-55% of standard portions in 2022
due to funding shortfalls
Humanitarian aid

6. • As household income falls,
households rely more on wheat as the
cheapest calorie source
• Small traders are a crucial source of
credit in the past for poor households
• 64% of traders sell on credit
• Traders themselves increasingly
report credit constraints
• Qualitative reports that households
are buying less and only in small
quantities rather than large bags
View from the household level
• Wheat and wheat products
represent a substantial share of
calories (71%) and budgets (25%)
for poor households

7. Egypt

8. Dependence on wheat imports
• Egypt is the world’s largest
importer of wheat
• Increase in imports from
Russia and Ukraine in past
decade
• Wheat represents 35-39% of
caloric intake
• Half of imports by government
for supply of subsidized wheat
flour and bread

9. Impact of the Ukraine war on prices
• Government maintained
subsidized prices of flour and
bread even as market prices
increased
• High fiscal burden of
contributed to several rounds
of currency devaluation
• EGP/USD exchange rate fell
from 16 to 30 between March
2022 and today

10. • Large majority of households benefit
from the ration card subsidy system
• Each household member receives 5
loaves of baladi bread per day for less
than 5% of the market price
• Egyptians on average consume 145kg
of wheat per capita annually, double
the global average
Subsidy system

11. View from the household level
• Majority of surveyed poor and
near poor households
reported decrease in
consumption of animal source
proteins due to increased
prices between January 2022
and October 2022
• Most common coping strategies:
• Stop repaying debt (84%)
• Eat lower quality food (74%)
• Eat less food (48%)
• Reduce spending on healthcare (41%)