The great game of grains

The balance of power in grain markets is shifting. Will this cause more food and energy related conflict?

Perhaps it is a coincidence, perhaps not, but increasingly both the supply and demand sides of the global grain market are in the hands of former communist states. Today, and unlike in the postwar period, neither China nor Russia could be described in simple terms as communist countries. But both are undoubtedly authoritarian, informed by their past history. This, as we have seen in particularly sharp relief this year, is a fact that can no longer be ignored in international grain markets. It is therefore useful to think through some of the issues surrounding global food security in a world in which conflict is more prevalent, and at a time when commodity prices are picking up.

A closer examination of the numbers makes clear that the former communist world has been a major player in world grain markets for a very long time. Stretching back to at least the 1950s, the Former Soviet Union (FSU) and China have together held a steady 25% to 30% share of world production of the main grains (see chart 01). At the beginning of this period, the FSU was a major producer, accounting for close to 16% of world grain production.

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