Global food shock is getting tougher to stomach

A WORSENING food shock is piling on the woes in a global landscape already beset by an unprecedented energy crunch. The chief culprits - supply chain disruptions and escalating prices, driven by a pandemic-driven push and further deepened by the Russia-Ukraine war.

Even worse, such trouble, given rising food prices and diminishing supplies owing to the geopolitical crisis, could linger through to 2024, reckoned S&P Global Ratings in a recent report. It cited fertilizer shortages, export controls, disrupted global trade, and escalating fuel and transport costs as factors that will exert upward pressure on the cost of staples. Low- and low-to-middle income countries are likely to suffer the brunt of this food crisis.

Russia and Ukraine, the world’s grain exporting giants, reportedly accounted for 24 per cent of global wheat exports by trade value, 57 per cent of sunflower seed oil exports and 14 per cent of corn, from 2016 to 2020. They also jointly account for 12 per cent of all food calories traded around the world. Russia and Belarus were the first- and sixth-largest exporters of fertilizers globally in 2020 while Ukraine is regarded as the world’s “bread basket”. Vladimir Putin’s invasion of Ukraine has prompted international economic sanctions against Russia, while much of Ukraine’s export stocks have been stuck at its ports, which have been cut off from the world by Russian warships. China’s Covid-19 lockdowns have also worsened the supply chain bottlenecks.

These developments have pushed up food prices, as a recently-released food price index of the ‘United Nation’s Food and Agriculture Organisation (FAO) shows. While the gauge of the monthly change in international prices of a basket of food commodities had marginally dipped in May for the second consecutive month from March’s all-time high, it remained 22.8 per cent higher on the year. That has led to some posturing that the problems facing the food systems are not due to inadequate supply but more because food has become unaffordable given inflationary pressures.

The truth is, even before this massive near-term crisis unfolded, there were already deep concerns over a looming and acute worldwide food security crisis. How is the world going to produce enough food to sustain the growing numbers of people? Prior to the war in Eastern Europe, there was already a hunger catastrophe, with more than 800 million people going to bed hungry nightly.

The world population is expected to reach 9.7 billion in 2050 and could peak at nearly 11 billion around 2100, according to a 2019 United Nations report. Global food demand will soar 56 per cent by mid-century, making it imperative to find more sustainable ways to produce food on less land to both feed the world while tackling climate issues. Food production accounts for 25 per cent of greenhouse gas emissions, 65 per cent of freshwater usage, and 40 per cent of land usage, according to FAO.

SEE ALSO

Out of the frying pan: Indonesians pay price of cooking oil crisis

Food shortages are next global health crisis: expert

UK food prices surging most in a decade signals more pain ahead

Global food prices fall again but wheat soars

More

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

If the pandemic has taught us anything, it is that there is no such thing as a perfect situation for the world to get its act together and find innovative ways to manage near-term challenges such as the current food and energy crises while keeping its eye on achieving climate stability over the long term. Instead, there is only a perfect storm, and if the problems are not fixed, a worrying humanitarian catastrophe could be afoot.