Ukraine war pushes global food prices to new record high

The prolongation of the war between two of the countries considered granaries of the world is driving up food prices in international markets, materializing the fear of a rise in malnutrition in the most vulnerable areas of the planet. The food price index of the FAO, the UN organization for food and agriculture, has reached in March the record level of 159.3 points12.6% more than in February, which until now had been the highest in the historical series.

The FAO does not hesitate to attribute the increase to the war “in the Black Sea region, whose effects expand to the markets for cereals and vegetable oils”. Thus, wheat prices rose by 19.7% in March (between Russia and Ukraine they account for 30% of exports of this cereal) and corn prices by 19.1% (the two countries in conflict account for 20% of sales to the entire planet). These increases have dragged into the rest of the cereals: Sorghum and barley have also set historical records since the FAO began to follow their prices with a uniform methodology, in 1990.

Vegetable oils increased their price even more: a 23.2% compared to February. The reduction in exports of sunflower oil, 80% of which is produced in Russia and Ukraine, has pushed up the rest of the products in this category: those from soybeans, rapeseed and palm, which were also already living upward pressure on their prices due to different problems in the main producing countries and due to the rise in oil prices.

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The war is also behind the FAO’s downward revision of its cereal production and trade estimates for the remainder of the 2021/2022 season, which ends June 30. Wheat production in Ukraine will fall, estimates the organization, because “at least one 20% of the area planted in winter could not be harvested, as a result of direct destruction, limited access or lack of resources to harvest what is planted & rdquor ;. In the case of Russia, despite the fact that the weather in recent months has been good for the harvest, the FAO warns of uncertainties “regarding the import of agricultural materials” required for collection.

With regard to cereal trade, the FAO revises its forecasts downwards and now contemplates a 2% reduction compared to the 2020/2021 season, again due to the war and the interruption in the flow of exports from Ukraine and Russia, which will only be partially offset by increased sales from the European Union and India -in the case of wheat- and from Argentina, India and the United States -for corn-, according to the estimates of the international organization.

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