Rabat – Morocco, Egypt, Jordan, Lebanon, and Tunisia top the list of the countries that will be affected the most from the spillover of the Ukraine war given their dependency on Russian, Ukrainian energy, and food imports, a new report has found.
The report, published by the American rating agency S&P Global Rating, says that Morocco’s energy bill to GDP is one of the largest among the five MENA countries. However, notes the report, the country’s large potash export will partially offset the cost of rising energy prices.
Despite its position as a food exporter, Morocco’s food market remains highly vulnerable to developments in the global market as it is highly reliant on grain imports, the report explains.
In addition, S&P Global Rating projects that the five Middle Eastern and North African countries will be locked in the crossfire of the conflict as their food and energy imports range between 4% to 17% of their GDP.
While the war and sanctions have severely crippled the global commodities market, the American rating agency expects prices to remain high as the Ukraine war continues to escalate.
With Russia and Ukraine accounting for close to 60% of global sunflower exports, more than 25% of wheat, and 15% of corn, Russia’s invasion of its neighbor will further strain global commodities prices, the report points out.
Sanctions against Russia and Belarus have equally continued to put pressure on fertilizers prices as the two countries are key global suppliers, driving food prices even higher.
The American rating agency expects food prices to remain high while the conflict will likely drag on more than expected.
Adding to the direct stress of the Ukraine war is that countries are increasingly turning to protectionism measures to ensure their national food security by imposing export bans that end up sending food prices to unprecedented heights, the report indicates.
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