By Dr. Ian Ralby, Dr. David Soud, Rohini Ralby
The image of Vladimir Putin and Xi Jinping together at the Beijing Olympics solidified, for many observers, the sense that Russia and China really are partnering up to simultaneously strengthen their own relationship and weaken the global power of the United States and its allies. Several major outlets have since raised concerns about this new dynamic in the “great power competition,” but so far, few public analyses have delved into how such a grand strategy might work, and fewer still have examined deeply enough how the Sino-Russian agreements reached in Beijing are a driving force behind Russia’s brazen invasion of Ukraine. Nor have they looked at what will come next. Amid all the moving parts of these machinations and the chaos of this conflict, one critical implication has been grossly underexamined: how Russia is relying on China’s support to weaponize global food supply chains in furtherance of an agenda that stretches far beyond Ukraine.
The building blocks of this strategy are already in place. Both US-China and US-Russia relations have hit new lows of mutual recrimination – likely the worst in the last three decades – and the global ambitions of Beijing and Moscow are filling the space left by Washington’s retreat from the world, initiated under the last Administration. The result is that the United States and Europe are relying on traditional pressure points that have less and less effect on international affairs. The recent Sino-Russian agreement on oil and gas will help shield Russia from the pain of further sanctions, thereby reducing the economic leverage NATO members can realistically apply. Responding to this invasion with sanctions, therefore, is little more than offering thoughts and prayers, particularly given not only Russia’s now unfettered access to certain Chinese markets, but also its use of cryptocurrencies, illicit gold and other transnational criminal financing schemes, and other sources of revenue that lie outside sanctionable and regulated systems. But it is actually the agricultural aspects of the pact with China about which the world should be most concerned.
Recent media reports have begun to note the critical importance of Ukraine’s remarkably fertile soil for global grain supply. But most reports have not taken further steps to recognize that Russia’s control of Ukrainian grain shipments will likely signal much more than price increases. After just one day of the invasion, Russia effectively controls nearly a third of the world’s wheat exports, three quarters of the world’s sunflower oil exports, and substantial amounts of barley, soy and other grain supply chains. Furthermore, Ukraine alone accounts for 16% of the world’s corn exports and has been one of the fastest growing corn producers – a dynamic particularly critical to meeting China’s rapidly growing demand for corn. Importantly, while hydrocarbon production can be immediately surged in different places to meet shifts in requirements, grain production cannot be surged in the same way, and even a major expansion cannot make up for the sheer volume of agricultural output that Russia now controls either directly or indirectly.
While media attention is rightly focused on the invasion’s impact on people in Ukraine’s most populous cities, in the background Russia is completing a hostile takeover of the country’s grain-rich regions and their associated transportation infrastructure. Critically, however, Russia does not even need to fully control Ukraine’s agricultural lands to weaponize the food supply chains they anchor. Indeed, it is already happening.
As the following map shows, there are only two points of maritime access that Russia needs to dominate in order to be in control of Ukrainian grain shipments: the Kerch Strait that connects the Black Sea with the Sea of Azov, and the 17 ports in and around Odessa.
As of Thursday, Russia has closed access to the Sea of Azov, and, irrespective of unsubstantiated Russian claims that two of its commercial ships have been attacked, Ukraine has closed all its commercial ports. Ukrainian grain is now offline.
Amid the shock of Russia’s flagrant violation of Ukrainian sovereignty, this overlooked development – the de facto sanctioning of the global grain market – is cause for further concern. The question is not whether there will be serious economic effects and critical food shortages in already fragile states. The question is what Russia will do with that.
There seem to be several likely and not mutually exclusive answers to that question:
- Use faux benevolence to expand hegemony and secure recognition;
- Target certain states to fuel conflict as a distraction and drain on Russia’s adversaries;
- Proceed to seize other non-NATO states and their supply chains;
- Leverage the pact with China to draw states away from Western influence; and
- Seek China’s recognition of Russian-invaded territories in exchange for Russian recognition of China’s claims to Taiwan.
1. Faux Benevolence:
Russia has already cut off critical grain supplies to countries that have hitherto relied on Ukrainian exports. With one of its well-documented false narrative campaigns, Russia will likely focus on selling to those states the notion that this increase in hardship is the fault of the West. In exchange for recognition of Russian claims to Ukraine and potentially elsewhere, the Kremlin would be willing to relieve that tension by providing the necessary grain. As the “benevolent” global power providing relief from such food security pressures, Russia will expand its hegemonic influence. In this context, it is worth remembering that Russia has a long history of using starvation as policy. That tactic fits into President Putin’s larger quest to reinvigorate Russia’s heritage as he envisions it.
2. Drain and Distract:
Notwithstanding the faux benevolence campaign, Russia may soon be in a position to decide not only who receives critical food supplies, but who does not. The resulting strategic gains for Russia could also mean deliberately creating targeted food security crises in some of the world’s most fragile states and regions. With countries like Yemen, Libya, Lebanon, Sri Lanka, and Sudan – among others – heavily reliant on Ukrainian grain, even a short-term delay in supply may have drastic consequences. Humanitarian emergencies, civil unrest, and even armed conflict across a number of regions are foreseeable consequences of Russian manipulation of the global grain market. Many analysts still argue that the Arab Spring in 2011 was most proximately caused by changes in grain prices. When large numbers of people struggle to afford the most fundamental of human needs, conflict and uprising are natural repercussions. Such instability will serve as a major distraction for the United States, Europe, and other allies who will work to alleviate such conflicts and humanitarian crises. This drain of attention and resources to other parts of the world will create further space for Russia to operate unmolested.
3. Targeting other Non-NATO States:
As NATO seeks to bolster its military presence in nearby NATO member states around the Black and Baltic Seas, the lesson from Ukraine for Russia may be: “As long as you do not attack the Alliance, we will not fight back.” Consequently, Russia may decide that Ukraine is not enough. Moldova, the remaining independent parts of Georgia, and even some of the Central Asian States like Kazakhstan – which recently welcomed Russian “peacekeepers” and is a leading source of grain for Iran and Afghanistan – may also be in Russia’s immediate sights. This approach may be particularly appealing if Russia can leverage relationships and economic drivers in those states while wielding the intimidation factor generated by its brazen success in Ukraine, and take over by annexation without a full military confrontation. If, as many recognize, President Putin’s true goal is to reestablish Russian territory as it once was, this approach to reclaiming former Soviet Republics is not at all far-fetched.
4. Leveraging the China Pact:
President Putin is not simply seeking to recover lost Soviet territory; he is intent on restoring Russian influence. Ironically, this is where China comes in. On 4 February 2022 – the day after a cyberattack on European oil and gas terminals underscored the urgency of rethinking critical energy supply chains to relieve dependence on Russia – Presidents Putin and Xi reached a major new trade deal in Beijing. As noted, Russia can effectively use this deal to avoid both the economic pain of sanctions and the fallout from Europe choosing not to buy Russian hydrocarbons. As the world’s largest energy consumer, China can buy up anything Russia wants to sell, thereby meeting Chinese demand, stabilizing the Russian economy, and creating an interdependence that may inspire China and Russia to align on other global interests. It will also likely inspire China to avoid joining Western powers in condemning Russian aggression or sanctioning Russian institutions. But the oil and gas deal – while extremely important – is actually not as significant as the agricultural deal.
Under the pact, China, one of the world’s largest importers of grain, will now import wheat produced anywhere in Russia, the world’s largest exporter of wheat, particularly with the added control of Ukrainian supplies. Previously, China restricted Russian imports to include only wheat and barley produced in certain regions, mostly in the eastern portions of the country. The remaining supply to meet China’s demand largely came from France, Australia, and Canada. This agreement now allows for grain from any Russian territory to be imported into China, potentially pushing the European Union, Canada, and Australia out of the marketplace – a particularly hard blow for Canada, which after a tough production year was down more than 34% in output from 2020.
And as significant as the wheat picture is, the dynamics around corn may be even more crucial. As mentioned, Ukrainian corn production has grown immensely in recent years to the point that it now provides 16% of global corn exports. More importantly, over the past few years Ukraine has been the chief supplier meeting China’s growing demand for corn. To give a sense of the volume: in 2020, China imported nearly four times the corn it did the previous year. While the causes for that increase were complex, analysts have noted that Chinese demand is likely to continue growing, with lasting strain on global supply. At first hearing, that might sound like good news for US farmers. As the chart below shows, only the United States rivaled Ukraine as a corn exporter to China in 2020.
The spike in US corn exports to China, which allowed the US to overtake Ukraine in 2021, is only partly accounted for by growing Chinese demand; it was also the result of a World Trade Organization ruling requiring China to change its administration of Tariff Rate Quotas in a way that opened its markets further to US grain. Unfortunately for US farmers, that ruling was not exclusive to the United States, and can be similarly exploited by other major corn producers – including not only Ukraine but also the other two of the world’s top four exporters, Brazil and Argentina. That fact alone sheds new light on Argentina’s recent enrollment in China’s Belt and Road Initiative, as well as Brazilian President Jair Bolsonaro’s visiting Moscow to talk agriculture and declare Brazil to be in “solidarity” with Russia while Russian forces surround Ukraine. One can easily imagine scenarios that put enormous pressure on entire economic sectors of the United States and key allies – both those who, like Canada and France, export corn, and those who, like Japan and South Korea, import it.
In essence, therefore, China’s agricultural arrangements with Russia, along with the hydrocarbons deal, formed the guarantee Russia needed to be able to attack Ukraine without fearing Western sanctions. Indeed, evidence indicates that, in the months leading up to the invasion, Beijing explicitly informed Moscow that it would not interfere with Russia’s plans – while also passing on to the Kremlin intelligence US officials had shared in a failed attempt to convince China to stand by its avowed principle of respecting sovereignty. In fact, China is also a major beneficiary of this Russian aggression, giving Beijing greater access to supplies to meet domestic demands in a fashion that weakens the economic standing of competitor states like the US, Canada, Australia, and those of the European Union. Effectively, therefore, China is allowing Russia to leverage their trade deal to perpetrate an assault on global food supply chains, as it advances both states’ ambitions for global influence.
5. Mutual Recognition:
Further to their trade deal, Russia and China may also look to each other to exchange recognition of contested areas. Given that the Chinese Foreign Minister has simultaneously declared the importance of Ukrainian sovereignty while also warning the United States not to antagonize Russia in Ukraine, it seems that how China views what may constitute “Russia” could also change. Russia’s move on 21 February 2022 to recognize the breakaway portions of Ukraine as independent, as well as President Putin’s argument that Ukrainian statehood is a “fiction,” could be setting up an exchange for mutual recognition as the invasion progresses: China for Russian-controlled areas of Ukraine, and Russia for Chinese sovereignty over Taiwan.
Over the last two years, the pandemic has brought to light how fragile global supply chains are. They are not just abstract concepts but physical realities, and as such they can be disrupted in any number of ways. The EVER GIVEN being stuck in the Suez for just six days cost the shipping industry $4oo million per hour and caused shortages of critical goods. The inability to sort crew changes has left shippers scrambling to maintain routes and schedules, impacting accessibility of all sorts of goods. The pandemic remains a challenge – but nefarious control of the global food supply chain could genuinely upend the world’s economy and its leading hegemonic power dynamics. In analyzing how to proceed in dealing with the Ukraine crisis, these foreseeable consequences cannot be overlooked.
Defending the NATO Alliance is and should be a priority for the US and its allies. But if they do not prepare to defend these global supply chains now, they may lose the ability to do so later. Time is of the essence to foreclose the possibility of a China-backed Russian takeover of global food security. Not doing so may lead to more changes in the world map, and changes in the world order.