The global trade network for staple food crops, particularly wheat, is vulnerable to systemic shocks due to concentrated production in a few major breadbasket regions and resulting import dependencies in many developing countries. Past crises (2007/08 and 2010/11) demonstrate the devastating consequences of simultaneous harvest failures and unilateral export restrictions, leading to massive price spikes and widespread food insecurity. The COVID-19 pandemic further exposed the fragility of the system, disproportionately affecting low- and middle-income populations. Recent years have also witnessed threats to regional food security from pests, plagues, and extreme weather events, highlighting the compounding risks of climate change. Historically, uncoordinated policy interventions such as export restrictions have exacerbated these crises. The intensification of extreme weather events due to global warming increases the likelihood of multi-breadbasket failures, underscoring the need for proactive adaptation measures. In early 2022, high fertilizer prices and pandemic-related supply chain disruptions already elevated food prices. The Russian invasion of Ukraine dramatically worsened the situation, causing agricultural commodity prices (wheat, corn, sunflower oil) to surpass previous crisis peaks. Ukraine and Russia contribute approximately one-third of global wheat exports, making the impact on wheat markets particularly critical. Many developing countries, especially in the Middle East, North and Sub-Saharan Africa, and Southeast Asia, rely heavily on imports from these two nations. The war's disruption of Ukrainian exports, infrastructure damage, and harvesting difficulties sparked fears of a major food security crisis. Various short-term (incentivizing reduced hoarding, livestock reduction, and rapid production increases) and long-term (plant-based diets, alternative biofuels, improved farming practices) strategies were proposed, although many were not implemented as prices normalized in June 2022 due to better-than-usual harvests and international agreements. The Black Sea Grain Initiative and the EU Solidarity Lanes Initiative played crucial roles in mitigating the crisis by enabling the continued export of Ukrainian grain and averting a more severe food crisis. This study examines the systemic risks to the global wheat supply network, focusing on simultaneous breadbasket failures and uncoordinated export restrictions, and assesses their impact on global wheat prices and national supplies, using the Food Stock Cascades (FSC) network model and the Trade With Storage (TWIST) model.

The existing literature extensively documents the vulnerability of the global food system to shocks. Studies highlight the role of simultaneous harvest failures in multiple breadbasket regions in triggering food price crises (e.g., 2007/08 and 2010/11 crises), often exacerbated by protectionist trade policies like export restrictions. These events underscore the interconnectedness of global food markets and the disproportionate impact on import-dependent countries, particularly in developing regions. The COVID-19 pandemic further underscored this vulnerability, revealing how supply chain disruptions and economic shocks can dramatically impact food security, especially in already fragile contexts. Research also points to the increasing frequency and severity of extreme weather events due to climate change, which further destabilizes agricultural production and global supply chains. Previous studies have employed various modeling approaches to assess systemic risks in the global food system, including network models to analyze supply chain interdependencies and dynamic models to simulate price fluctuations in response to supply and demand shocks. However, a comprehensive integration of both aspects—the network structure and the dynamic price responses—in a consistent framework is still needed for improved risk assessment. There is an existing body of work focusing on the specific impacts of the 2022 war in Ukraine on global food security. This research highlights the vulnerability of certain regions due to dependence on Ukrainian and Russian wheat, identifying those most at risk of severe food shortages. However, there's a scarcity of comprehensive quantitative analyses examining the interplay between international cooperation, the mitigation of these risks, and the potential for even more severe crises under various scenarios.

This study uses two complementary modeling approaches to assess the impact of the Russian invasion of Ukraine on the global wheat market: the static Food Stock Cascades (FSC) network model and the dynamic Trade With Storage (TWIST) model. The FSC model calculates each country's annual wheat supply by summing up domestic production, imports, initial reserves, and subtracting exports. It provides a detailed assessment of country-level supply imbalances resulting from production anomalies or export restrictions. The TWIST model is a global supply-demand model that calculates year-to-year changes in equilibrium world market prices and storage movements driven by annual production and demand data. It offers insights into the broader implications of supply and demand shifts on global food security and market stability. The models are used in parallel, not coupled, to leverage their respective strengths while avoiding the complexities of integration. The FSC model uses country-to-country trade data from FAOSTAT and country-level production, consumption, and ending stocks data from the USDA-PSD database. The TWIST model is driven by annual production and consumption data from USDA-PSD, and export restriction data from IFPRI. The scenario analysis compares the factual price hike and impaired supply in the 2022 trade year to several counterfactual scenarios. These counterfactuals explore scenarios of no Black Sea Grain Initiative, completely blocked Ukrainian exports, continued export restrictions by non-conflicting countries, a combination of the above three (lacking international cooperation), historical stressors (multi-breadbasket failures and escalating export restrictions from the 2007/08 crisis), and a worst-case scenario combining these stressors with completely blocked Ukrainian exports. Additionally, the study investigates the mitigation potential of short-term coping strategies: reduction of feed consumption in the EU and globally, reduction of global wheat stocks, and increased production by major producers. The impact of these coping strategies on the global wheat market price is evaluated using the TWIST model, while FSC model is used to analyze country-level supply imbalances. The analysis focuses on first-order effects, excluding higher-order effects such as energy price spillovers.

The TWIST model successfully reproduced historical wheat prices with a coefficient of determination (R²) of 0.82. In the factual scenario, the simulated wheat price for the 2022 trade year was 37.0% higher than the 2000-2020 average, closely matching the reported 31.8% increase. The FSC model revealed that countries most reliant on Ukrainian wheat experienced the most substantial supply disruptions. The counterfactual scenarios demonstrate the significant role of international cooperation in mitigating the crisis. The absence of the Black Sea Grain Initiative alone would have increased the price hike by 3.0 percentage points (pp). A complete blockage of Ukrainian exports (no Black Sea Grain Initiative and no EU Solidarity Lanes) would have increased it by 8.3 pp, leading to widespread and severe supply failures in many import-dependent countries. Continued export restrictions by non-conflicting countries would have raised the price by an additional 4.7 pp. The scenario with 'Lacking international cooperation' (combining the above three) projected a 13.3 pp higher price hike than the factual scenario. The counterfactual scenarios based on historical stressors (multi-breadbasket failures and escalating export restrictions) show a dramatic exacerbation of the crisis. The 'Multi-breadbasket failures' scenario resulted in a 22.1 pp higher price hike than the factual scenario, exceeding even the 2007/08 crisis. The 'Escalating export restrictions' scenario increased the price by 17.3 pp. The combined 'Historical stressors' scenario doubled the factual price increase, leading to severe supply failures. The 'Worst Case' scenario (combining blocked Ukrainian exports with historical stressors) resulted in a 52.5 pp increase, significantly exceeding the 2007/08 crisis. Over 28% of countries faced supply shortages exceeding their domestic reserves. The analysis of short-term coping strategies indicates that a 30% reduction in EU feed consumption would decrease the price hike by 5.8 pp. A similar reduction globally would halve the price increase. Reducing global stocks by 1% and 5% decreased the price increase by 6.5 pp and 31.5 pp, respectively. A 3% production increase by major producers reduced the price hike by 7.6 pp, while a 3% global production increase reduced it by 13.4 pp. A combination of moderate coping strategies more than halved the price increase, while a combination of rigorous strategies decreased it by 59.1 pp.

The findings strongly support the critical role of international cooperation in mitigating the global food security crisis triggered by the war in Ukraine. The Black Sea Grain Initiative and the EU Solidarity Lanes were instrumental in maintaining Ukrainian wheat exports and preventing a much more severe price spike and widespread supply disruptions. The study highlights the interconnectedness of the global wheat market and the significant vulnerability of import-dependent developing nations to shocks. The counterfactual scenarios based on historical stressors show the potential for even more severe crises if simultaneous harvest failures and uncoordinated export restrictions were to occur. The analysis of short-term coping strategies indicates that a combination of demand-side (reduced feed consumption and stock reductions) and supply-side (increased production) measures can significantly mitigate price increases. However, each strategy comes with its own implementation challenges and potential side effects. The results align with existing literature on food security risks, emphasizing the importance of international collaboration and the need for coordinated policy responses. The limitations of the modeling approaches, such as the exclusion of higher-order effects and the simplified representation of market dynamics, should be considered when interpreting the results.

This study demonstrates the critical role of international cooperation in mitigating the global food security crisis stemming from the war in Ukraine. The Black Sea Grain Initiative and the EU Solidarity Lanes effectively prevented a much more severe price spike and widespread supply disruptions. The results highlight the vulnerability of import-dependent countries and the potential for future crises to be far worse if similar factors combine. Short-term coping strategies can be effective when implemented in a coordinated manner. However, each measure has its own set of challenges that need to be addressed. Future research should focus on developing more sophisticated models that can fully account for the complexities of global food trade and accurately predict the effectiveness of various coping strategies. This would be critical for timely and effective interventions during future food security crises.

The study has several limitations. The TWIST model, while effective in simulating global market dynamics, neglects certain factors such as inter-market interactions and short-term market forces. The FSC model, as a static network model, does not account for dynamic trade flow adjustments. The analysis omits higher-order effects, potentially leading to an underestimation or overestimation of the price hikes. The model also does not account for demand-side responses such as redistribution of demand or panic buying. Finally, the scenarios are simplified, focusing mainly on production failures and export restrictions without considering other relevant factors or political complexities.