Global bodies call for international intervention on food security

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A group of influential banking and trade institutions have called for international support for countries most exposed to rising food prices, warning of potential unrest in some of the most vulnerable countries.

The World Bank, International Monetary Fund, World Trade Organization and United Nations World Food Program have joined forces to push for a range of measures to protect food security as the conflict in Ukraine increases upward pressure on commodity prices.

For every one percentage point increase in food prices, the World Bank estimates that ten million people worldwide are pushed into “extreme” poverty.

“The threat is greatest for the poorest countries where much of their consumption comes from food imports, but vulnerability is increasing rapidly in middle-income countries, which are home to the majority of the world’s poor,” the ministers said. heads of the four organizations in a joint statement. statement. “Rising food prices and supply shocks can fuel social tensions in many affected countries, especially those that are already fragile or affected by conflict.”

As the Russian invasion of Ukraine enters its seventh week and Covid-19 stretches into a third year, the group has called on the international community to provide emergency food and financial support to vulnerable countries.

“It is essential to quickly provide coordinated support to countries facing food insecurity. We stand ready to work with our multilateral and bilateral partners to help countries address this urgent crisis,” the group said.

Less than a week ago, the Food and Agriculture Organization of the United Nations reported that global commodity prices had hit new records, with cooking oils ranging from sunflower to palm, soybeans and rapeseed all increasing, as well as grains ranging from wheat to barley, corn and sorghum. Meat and dairy also continued their upward trend.

“Rising food prices are exacerbated by a dramatic increase in the cost of natural gas, a key ingredient in nitrogen fertilizers,” the group of four observed. “The spike in fertilizer prices, together with significant reductions in global supplies, have significant implications for food production in most countries, including major producers and exporters, which are heavily dependent on fertilizer imports.”

Russia, a major fertilizer producer and exporter and the largest supplier of nitrogen fertilizers, ordered domestic producers to suspend exports in March in retaliation for the international disruption of inbound trade. Fertilizers produced in Russia and domestically produced shellfish were also included in a fifth round of sanctions last week by the European Union.

“The world is rocked by worsening crises,” the institutional officials said, adding climate change and “increased fragility” linked to global conflicts into the equation. “The sharp rise in commodity prices and supply shortages are increasing the pressure on households around the world and pushing millions more into poverty.”

They added: “We also urge the international community to help meet urgent funding needs, including through grants. This should include funding for immediate food supplies, safety nets to meet the needs of the poor and small farmers facing higher input prices.

“We also urge all countries to keep trade open and avoid restrictive measures such as food or fertilizer export bans that further exacerbate the suffering of the most vulnerable people. It is particularly important not to impose export restrictions on humanitarian food purchases by the United Nations World Food Programme.

Russia and Ukraine were responsible for 58% of global sunflower oil production last year, along with 19% of oats and barley and 14% of wheat, according to the US Department of Health. ‘Agriculture. Russian and Ukrainian exporters accounted for 44% of rye, 30% of barley and 25% of wheat.

Egypt, Turkey, Bangladesh and Sudan were the top destinations for Russian wheat by value from 2016 to 2020, according to trade statistics body Comtrade. Iran, Turkey, South Korea and Vietnam were the main importers of maize produced in Russia.

The Global Banking and Trade Institutions Group said: “We call on the international community to urgently support vulnerable countries through coordinated actions ranging from the provision of emergency food, financial support, increased agriculture and open trade.

“We are committed to combining our expertise and funding to rapidly scale up our policy and financial support to help vulnerable countries and households, as well as to increase domestic agricultural production and supplies to affected countries. We can ease balance of payments pressures and work with all countries to keep trade flows open.

See Just Food’s analysis here: As commodity supplies dwindle and prices rise, low-income countries are feeling the impact of war in Ukraine

For more of Just Food’s coverage of how the dispute is affecting the food industry, please visit our dedicated microsite.

Just Food’s parent company, GlobalData, provides ongoing analysis of the impact of war on all business sectors.

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