Ukraine is considered the "breadbasket of Europe," and the Russian invasion is choking off grain exports, sending global food prices to record highs.
Grain prices surged to record highs last week as world food prices are now higher than they were during the 2011 Arab Spring, leaving us with an abundance of caution that political uprisings due to food price shocks could be right around the corner.
On Friday, the UN Food and Agriculture Organization (FAO) Food Price Index (FFPI), a measure of the monthly change in international prices of a basket of food commodities, reported record-high prices for February. Prices are, in fact, 3.1% higher than they were in February 2011 when anti-government protests, uprisings, and armed rebellions sprung up around the Arab world.
The risk of an uprising happening again is rising. Everyone's favorite permabear, SocGen's Albert Edwards, opined two years ago about future agricultural price shocks and how they could cause another Arab Spring.
We want to determine which countries are most vulnerable to food price shocks and shortages because of the Ukrainian crisis. Bloomberg data shows the most reliant countries on Ukraine wheat, including Egypt, Indonesia, Bangladesh, Pakistan, and Turkey.
While there are no indications that any of these countries are on the brink of social unrest, keep a close eye on them as food prices soar and spring in the northern hemisphere is two weeks away.