Food prices remain at record highs worldwide

InternationalJune 3, ’22 1:32 pmAuthorMark van Harreveld

World food prices remain sky-high. This is stated by the FAO, the Food and Agriculture Organization of the United Nations. Thanks to the war in Ukraine, grain prices have risen sharply, i.a. At the same time, the availability of fertilizer components has decreased.

As a result of the Russian invasion, exports from Ukraine, one of the world’s largest carriers of grain and vegetable oil, have fallen sharply. Ukraine no longer has the port of Mariupol because it is in the hands of the Russians. The port of Odessa is blocked and only a fraction of maritime transport is carried out by rail. The UN warns that food shortages could cause millions of people to emigrate.

Production decline

According to the FAO, global grain production will fall to 2,784 million tonnes by 2022, for the first time in four years. That’s a drop of 16 million tonnes from the record production forecast for 2021, according to the latest FAO Cereal Supply and Demand Brief, also released today. Of the main cereals, the largest decrease is expected for maize, followed by wheat and rice. Global production of barley and sorghum is likely to increase in 2022.

Based on the first FAO forecasts for global grain production in 2022 and use in 2022/23, grain production “would not be sufficient to meet the expected use requirements”.

According to the FAO, food became a fraction cheaper in May compared to a month earlier, when vegetable oil prices fell by 3.5 percent. This is partly due to the fact that Indonesia has lifted the export ban on palm oil. The FAO further notes that farmers worldwide are not only facing higher costs for energy and labor, but that there is a shortage of fertilizers. It could exacerbate the food crisis of 2023, the FAO said.

Even before the war in Ukraine, food prices were high due to disrupted supply chains and increased demand for the corona pandemic. As usual, poor countries are hardest hit by food inflation. The fact that vegetable oil and cereal prices remain high is also due to countries taking protectionist measures to protect their own markets. For example, Malaysia banned the export of chicken, while India made it harder to export sugar and wheat.

Also read | Severe famine in the Horn of Africa

Social uro

Standard & Poor’s warns that the food crisis will last until 2024 and possibly longer. And that it can have consequences for countries’ economic growth, creditworthiness and social stability. The latter can be called an open door, but most analysts agree that the Arab Spring in 2010 was primarily caused by high food prices. The International Rescue Committee also warns of an imminent famine that could hit another 47 million people – primarily in the Horn of Africa, the Sahel, Afghanistan and Yemen – in acute famine.

According to The Financial Times, almost 700 million people in 2021 lived on less than 1.70 euros a day. Something that the World Bank uses as a measure of extreme poverty. Any significant increase in food prices could bring millions of others back into this category.

The African Sahel country Chad has since declared a state of emergency due to insufficient wheat entering the country. The country’s military government stresses that the food situation has deteriorated since the beginning of this year and calls for international aid. According to the UN, about a third of the Chadian population of 16 million people is dependent on international food aid.

Putin

On Friday, Russian President Vladimir Putin will receive the leader of the African Union, Senegalese President Macky Sall, at his Black Sea residence in Sochi. They will talk about grain deliveries and political cooperation. The visit aims to “free up stocks of grain and fertilizer whose blockade mainly affects African countries,” Sall’s office said. According to the Kremlin, the talks will address “issues of Russia’s interaction with the African Union, including the expansion of political dialogue, economic and humanitarian cooperation.”

“The current international agenda will also be discussed,” the Kremlin said.

Also read | The African Union calls on the EU to prevent food disasters

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