Schroders has warned that Russia’s invasion of Ukraine could worsen what is an already threatened global food supply.
The statement from Mark Lacey, head of global resource equities, and Alex Monk and Felix Odey, both portfolio managers of global resource equities, said that more needs to be done by the companies that ensure food security and sustainability to create a sustainable food and water system to prevent negative consequences.
Schroders estimated that $30 trillion would need to be invested between now and 2050 to achieve this.
The statement comes as there are increasing concerns that the Russian invasion of Ukraine could risk future food shortages as Russia, along with being a global oil and gas supplier, is a key producer of agricultural commodities.
Russia and Ukraine together account for 30% of the world’s wheat exports, according to Schroders. Russia is also a key producer of the resources used in fertiliser products such as nitrogen, phosphate and potash.
The impacts and disruption of the conflict and sanctions will disrupt the trade of these commodities, according to Schroders, and impact crop yields in countries globally.
Schroders said it was “particularly struck by” a recent statement from Yara, a Norwegian fertiliser company, which recently warned that according to the most extreme calculations, crops could be reduced by 50% by the next harvest due to the disruptions.
Schroders said the issue could be further exacerbated if richer nations, such as the EU, intervene in agricultural markets to subsidise food prices to cap inflation, possibly making the food availability gap between poorer and richer nations even wider than it is currently.
Schroders ended the statement by outlining the three structural changes needed to create a sustainable food and water system. These included more efficient and higher agricultural yields, enabled by technology, changes to global diets, including lower meat consumption, and a major reduction in waste and emissions.
