A United Nations agency said the war in Ukraine sent food prices soaring in March to all-time highs.
The Food and Agriculture Organization of the United Nations (FAO) announced on Friday that its FAO Food Price Index, which tracks monthly changes in the international prices of a “basket of commonly traded food commodities”, has averaged 159.3 points in March. That’s a 12.6% increase from February, which had already reached the highest level since the organization began tracking in 1990. It’s also 33.6% more than in March. last.
The FAO says the war “has spread shocks to markets for staple grains and vegetable oils”.
Russia and Ukraine collectively accounted for around 30% of global wheat exports and 20% of maize exports over the past three years, the organization said, with conflict-related export disruptions in the two countries causing a spike in world wheat and coarse grain prices. The FAO Cereal Price Index was 17.1% higher in March than it was in February.
“The expected loss of exports from the Black Sea region has exacerbated the already tight global availability of wheat,” the organization added. “With concerns over crop conditions in the United States of America also adding support, global wheat prices rose sharply in March, climbing 19.7%.”
He also notes that Ukraine is the world’s largest exporter of sunflower oil and says that rising sunflower oil and crude oil prices have pushed up the prices of other vegetable oils, such as palm oils. , soy and rapeseed. In total, the FAO Vegetable Oil Price Index rose 23.2% in one month.
The FAO recorded smaller increases in its indices for sugar, meat and dairy products, for which it cited a number of factors (from a shortage of slaughter pigs in Western Europe to the appreciation of the real Brazilian).
The organization has also released new forecasts for the production and use of cereals (or cereals used for food) for the 2021/2022 season to reflect the expected impact of the war on cereal markets. It says the wheat production forecast has been lowered slightly since last month’s estimate, but still points to a 1.1% increase (to 784 million metric tonnes).
“Port closures in Ukraine are severely limiting exports from the country, while financial and freight problems are hampering exports from the Russian Federation,” he explained. “These factors will likely remain in effect for the remainder of the 2021/22 season.”
The FAO says the expected loss of exports will result in lower shipments to and from the region, higher world prices, reduced imports, slower demand growth and “lower than expected stocks in several country”. All of this is on top of increased market uncertainty, altered trade flows and altered export measures.
It also lowered its forecast for world grain trade, citing the war and currently available information. As compensation, he predicts that the European Union and India will increase their wheat exports while the United States, Argentina and India will ship more corn.
World food security experts fear that Russia’s war in Ukraine could cause an increase in severe malnutrition and even starvation far beyond its borders. NPR’s Nuith Aizenman reports that there could be monetary solutions – despite the poor global results in this area.
This story originally appeared in the morning edition live blog.