The food price may rise another 22% if the disruption to world trade due to the war between russia and ukraineprojected the Food and Agriculture Organization of the United Nations (FAOby its acronym in English).
In a special report, FAO experts estimated that this impact will extend well beyond the current cycle.
Russia is the world’s largest exporter of wheat while Ukraine is the fifth and together they provide 19% of the world’s supply of barley, 14% of wheat and 4% of corn in the world. Both countries contribute 52% of the world market for export of sunflower oil and the world supply of fertilizers is concentrated in Russia, detailed the Organization’s experts.
In a preliminary assessment of the impact of the war in Ukraine, presented by the FAO Director-General QU Dongyuexplained that this new increase in world food prices will be an additional pressure for households, particularly the most vulnerable, who usually allocate a greater proportion of their income to the purchase of these basic products.
Just last week, the FAO announced that the food price index stood at an average of 140.7 points in February, which is 20.7 points above the level of the same month last year.
According to the manager, the alternatives for other countries to fill the gap that Russia and Ukraine will leave in world supply are very uncertain.
New food providers
This analysis takes place in the midst of the series of economic and commercial sanctions that the West is imposing on Russia for the invasion, which include canceling privileges of the most favored nation for exports to the United States and Russia’s response to also close its trade. To the exterior.
The repercussions also show the importance of Ukraine, because according to the report, there are no conditions for farmers to continue their activities and, as is known, this country is known as “the breadbasket of the world” for its important contribution to the tables of more from 50 countries.
The FAO proposed four recommendations regarding public politics to face this challenge that grows as the Russian invasion continues:
- Keep the global food and fertilizer trade open
- Find new and more diverse food providers
- Support vulnerable groups, including internally displaced people
- Strengthen market transparency and dialogue
Latin America, first call
The economic research team Institute of International Finance (IIF) estimates that Latin American commodity exporters may find some kind of opportunity to replenish part of the supply that will no longer be traded because of the war.
This could generate unexpected income to the economies of the region; However the Director of Economic Research for Latin America of the IIF, Martín Castellanoexplained to The Economist that this effect can qualify the secondary impacts of the invasion of Ukraine.