UN says global food crisis is about affordability, not availability

Food prices remain stubbornly high as Russia’s war in Ukraine drags on, exacerbating existing pressure from supply chain disruptions and climate change.

The war has “put a lot of fuel on an already burning fire”, said Arif Husain, chief economist at the United Nations World Food Programme.

Ukraine is a major producer of raw materials such as wheat, corn and sunflower oil. Although exports globally were curtailed due to the Russian invasion, Husain said the global food crisis was not due to the availability of food, but to soaring prices.

“This crisis is about affordability, which means there’s food available, but the prices are really high,” he said on CNBC’s “Capital Connection” Monday.

According to figures from the Food and Agriculture Organization of the United Nations, global food prices in July were 13% higher than a year ago. And prices could continue to rise. In its worst-case scenario, the UN estimates that global food prices could rise another 8.5% by 2027.

Fertilizer prices are also rising, contributing to higher food prices as costs are passed on to consumers. Prices jumped after Russia – which accounts for around 14% of global fertilizer exports – curbed its exports. This in turn reduced crop yields.

This, combined with high energy prices and supply chain disruptions, will affect the World Bank’s ability to respond to increased food production over the next two years, said Mari Pangestu, Managing Director. of Development Policy and Partnerships at the World Bank. All that uncertainty could keep prices high beyond 2024, she said.

While the UN’s Husain argued that the current crisis stems mainly from high prices and accessibility issues, he said it could turn into a food availability crisis if the shortage of fertilizers does not was not resolved.

The UN estimates that the number of people in “emergency hunger”, which it defines as a step towards starvation, has risen from 135 million in 2019 to 345 million, Husain said.

Heat wave in China

Extreme weather and climate change are also exacerbating conditions that contribute to global food insecurity. China, the world’s largest wheat producer, has suffered multiple weather disruptions, ranging from flash floods to severe droughts.

Earlier this month, the country issued its first drought emergency as central and southern provinces endured weeks of extreme heat, with temperatures in dozens of cities exceeding 40 degrees Celsius, or 104 degrees Fahrenheit . The heat wave hampered agricultural production and endangered livestock.

“Rice production is certainly very vulnerable to climate temperature changes,” said Bruno Carrasco, director general of the sustainable development and climate change department at the Asian Development Bank. “When we look at the overall supply of food production in Asia-Pacific, about 60% of that comes from rain-fed agriculture.”

“We are very concerned given the global weather events that we have seen and observed over the year,” he added.

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