Global food prices have reached a new high, with the highest monthly rate in 14 years after the war in Ukraine hit supplies of grains and vegetable oils, in a shift likely to wreak the most damage in poorer countries around the world.
The UN Food and Agriculture Organization’s March food price index rose to its third record in a row, rising 34 percent from the same time last year after the war shut down supply lines from Ukraine and Russia. The index was 12.6 percent higher than in February, an increase the organization described as a “huge jump.”
Many poorer countries are already experiencing the effects of Covid-19, with several in the Middle East and North Africa relying on both Ukraine and Russia for their grain and vegetable oils. Food inflation has sparked protests in a number of countries, including Sri Lanka, where the issue has sparked a serious economic and political crisis.
“The ongoing conflict in Ukraine raises concerns about the impact on global food security,” said Beth Bechdol, FAO deputy director general. “We’re seeing rising food prices across the board.”
According to estimates by the FAO and the Ukrainian government, 20 to 30 percent of the land in Ukraine that produces winter cereals, maize and sunflower will be left unplanted this spring or not harvested in July and August.
The resulting global gap between supply and demand for food and feed could raise international food prices by an additional 8 to 22 percent above already high levels, according to the FAO.
Russia and Ukraine are major exporters of grains and sunflower oil, accounting for about 30 percent of the global wheat trade. Russia has continued to ship wheat since it invaded its neighbor in February, but Western sanctions have complicated payments, leading to supply uncertainties.
The World Bank has already warned that higher food prices could cause lasting damage to low- and middle-income countries and help push millions of people into poverty.
Food costs account for 17 percent of consumer spending in advanced economies, but a much larger share in developing countries. In sub-Saharan Africa, for example, food accounts for 40 percent of consumer spending.
Food price inflation had already taken root before the war started in Ukraine, following poor harvests last year due to bad weather and a sharp recovery in demand after the pandemic. But according to the FAO, nearly 50 countries depend on Russia and Ukraine for at least 30 percent of their wheat imports.
In 2021, 36 of the 55 countries experiencing food crises depended on Ukrainian and Russian exports for more than 10 percent of their total wheat imports, including 21 countries with major food crises.
If the food shortage continues, the global number of undernourished people could increase by 8 to 13 million, with the most pronounced increase in Asia-Pacific, followed by sub-Saharan Africa, and the Near East and North Africa, the said. FAO. †
The fastest gains in the March index were vegetable oil prices, which rose 56 percent from a year ago, reaching an all-time high.
“International quotations for sunflower oil rose significantly in March, fueled by reduced export stocks during the ongoing conflict in the Black Sea region,” the FAO said.
Grain prices rose 37 percent year over year, also reaching an all-time high.