UN: Ukraine War Could Trigger Up to 22% Increase in Cost of Food Worldwide
The UN Food and Agriculture Organization (FAO) reported on March 11 (pdf), that international food and feed prices could rise by up to 22 percent due to the conflict in Ukraine, which may lead to a rise in malnourishment in less developed countries.
Total global food output has fallen since the Russian invasion of Ukraine in late February, resulting in a sudden and steep reduction of food from exporting nations.
Several food exporting nations worldwide are announcing additional food export restrictions, or are considering bans to protect their domestic supplies.
The FAO has urged major food producing countries not to impose export restrictions on their own produce.
“Before enacting any measures to secure food supply, governments must consider their potential effects on international markets,” said FAO Director-General Qu Dongyu.
“Reductions in import tariffs or the use of export restrictions could help to resolve individual country food security challenges in the short term, but they would drive up prices on global markets,” he said.
The conflict has critical implications for wheat supply internationally.
Since the conflict in Eastern Europe began, Ukrainian ports have been unable to export grain, while food traders are avoiding purchases from Russia as a result of the financial sanctions, raising global prices.
Russia and Ukraine together provide 19 percent of the world’s barley supply, 14 percent of its wheat supply, and 4 percent of its maize.
In addition to grain, Russia is a leading exporter of fertilizer.
The FAO’s food price index hit a record high in February and it looks certain to climb further in the months ahead, as it is not clear whether Ukraine will be able to harvest crops this year if the war continues to drag on.
“Many of them are least developed countries or low-income, food-deficit countries” in Africa, Asia, and in the Middle East are highly sensitive to prolonged food shortages, said Qu.
Fifty countries rely on Russia and Ukraine for 30 percent of their wheat supply when considered together, according to the FAO.
The UN said only part of the expected shortfall in exports from Russia and Ukraine can be met by other countries, and that many of the least developed depend on the two countries for much of their wheat supply.
About 70 percent of Egypt’s and Turkey’s wheat supply comes from Russia and Ukraine, while 90 percent of Lebanon’s wheat and cooking oil imports come from Russia alone.
Poorer countries in regions like in Africa rely on overseas supplies to subsidize bread for their growing populations.
Russia supplies most of Africa’s wheat consumption, which imported $4 billion worth of agricultural products from the country in 2020.
“The conflict’s intensity and duration remain uncertain,” said Qu. “The likely disruptions to agricultural activities of these two major exporters of staple commodities could seriously escalate food insecurity globally, when international food and input prices are already high and volatile.”
“The conflict could also constrain agricultural production and purchasing power in Ukraine, leading to increased food insecurity locally,” he added.
Meanwhile, much of the West, including the United States, are suffering from soaring inflation.
Data released by the U.S. Labor Department on March 10, showed a 7.9 percent increase in prices over the past 12 months, including 0.8 percent in February alone.
American consumers have already been hit hard by high gas prices and retail prices, which have been exacerbated over the past two weeks by the Biden Administration’s ban on Russian oil imports.
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