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Highlights
- Food prices climbed to a record high in March, reports UN agency.
- Food prices worsened due to Russia-Ukraine crisis.
- Russia and Ukraine are the top producers of wheat and corn in the world.
Amid the ongoing war between Russia and Ukraine, resulting in market upheavals, world food prices surged to nearly 13% in March, marking a new high. Prices have gone through the roof for staple grains and edible oils, reported the UN food agency on Friday.
The food price index of the Food and Agriculture Organization (FAO) averaged 159.3 points in March against an upwardly revised 141.4 for February.
Even the February figure, which was previously put at 140.7, was a record at the time.
Looming threat of malnutrition as food prices soar
As a result of the growing food prices, there is a heightened threat of malnutrition among the people. According to an FAO statement last month, food and feed prices could rise by 20% due to the conflict between Russia and Ukraine.
FAO’s cereal price index scaled to 17% in March, which is a record, while the vegetable oil index rose 23%, another highest reading.
Both countries are top exporters of wheat, corn, barley, and sunflower oil that travel via the Black Sea. But the war has halted all exports.
The prices of food commodities were already in bad shape (running at a 10-year high) before the war, owing to the global harvest problems. But when the disruption to the supply chain began to manifest in the Black Sea region due to the war, food prices rose exorbitantly and touched a record high. Prices of sugar and dairy products also peaked last month.
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Poor wheat production
The FAO also projects a poor world wheat production in 2022, sliding to 784 million tons from 790, considering that at least 20% of Ukraine’s winter crop fields would be bereft of any harvest.
The FAO estimates of the global cereals trade in 2021-22 are also not very bright, as increased exports from other nations like Argentina, India, the EU, and the US could only make up for some shortages due to the disruption in the Black Sea.
Bottom line:
The war between Russia and Ukraine is cascading into a global market crisis with rising food prices and other commodities. The uncertainty of the war situation poses a new threat to global food security.
The world is invariably staring at a shortage of food supplies as Russia and Ukraine, the major suppliers of wheat and corn in the world, are engaged in a war that is nowhere near the finish line.
