As Russia’s war in Ukraine drags on, food prices stay persistently high, aggravating pressures from supply chain disruptions and climate change.
According to Arif Husain, chief economist at the United Nations World Food Programme, the war has “put a lot of fuel on an already burning fire.”
Ukraine is a significant producer of commodities like wheat, corn, and sunflower oil. Although Russia’s invasion has limited global exports, Husain claims that the global food crisis is being driven by rising food prices rather than scarcity.
“This crisis is about affordability, meaning there is food available, but the prices are really high” he said.
According to the United Nations Food and Agriculture Organization, global food prices were 13% higher in July than a year ago. And prices may continue to rise. In its worst-case scenario, the United Nations predicts that global food prices will rise another 8.5 per cent by 2027.
Fertilizer prices are rising as well, which contributes to higher food prices as costs are passed on to consumers. Prices rose after Russia, which accounts for approximately 14% of global fertilizer exports, restricted exports. Crop yields have suffered as a result.
This, combined with high energy prices and supply chain disruptions, will have an impact on the World Bank’s ability to respond to the increase in food production over the next two years, according to Mari Pangestu, the World Bank’s managing director of development policy and partnerships. All of this uncertainty, she believes, will keep prices high beyond 2024.
While the United Nations’ Husain argued that the current crisis is primarily caused by high prices and affordability issues, he warned that if the fertilizer shortage is not resolved, it could turn into a food availability crisis.
According to Husain, the number of people in “hunger emergencies,” defined as one step away from famine, has increased from 135 million in 2019 to 345 million.
Extreme weather and climate change are also aggravating the problems that contribute to global food insecurity. China, the world’s largest wheat producer, has been hit by a series of weather disasters, ranging from flash floods to severe droughts.
Earlier this month, the country declared its first drought emergency after weeks of extreme heat in the country’s central and southern provinces, with temperatures in dozens of cities exceeding 40 degrees Celsius, or 104 degrees Fahrenheit. The heat wave has hampered crop production and put livestock in jeopardy.
“Rice production is certainly very vulnerable to changes in weather temperature,” said Bruno Carrasco, director general of the sustainable development and climate change department at the Asian Development Bank. “When we look at the overall supply of food production in Asia-Pacific, approximately 60% of that is rain-fed farming.”
“We are very concerned given the overall weather events that we’ve seen and observed over the course of the year,” he added.
(Adapted from CNBC.com)