Monday, May 16, 2022
spot_img

Record rise in food prices around the world due to Ukraine-Russia war

Advertisement

Zubair Yaqoob
The author has diversified experience in investigative journalism. He is Chief content editor at wnobserver.com

Global food prices jumped to a new record in March, the Food and Agriculture Organization of the United Nations (FAO) reported on Friday, as the war in Ukraine disrupted markets for grain and vegetable oils.

The FAO Food Price Index, which measures the most traded food commodities globally, averaged 159.3 points last month, compared to 141.4 points after an upward revision in February.

Before the adjustment in February, the index registered 140.7, a record at that time.

The Ukrainian war has caused economic pressures on countries around the world and crises in the supply chains of various goods, and nearly half of British companies expect their sales to decline within months, according to a survey conducted by the Bank of England.

The latest survey by the Bank of England to policymakers also found that uncertainty continued to rise, with concern about inflation also rising.

In the same context, industry leaders in Britain have warned that households face sharp rises in food prices for months as well as increasing emptiness of grocery stores and supermarket shelves as the war in Ukraine is causing a major disruption in the supply of key ingredients.

Producers have called on the government to urgently convene a National Food Security Council to shore up supplies as sharp declines in exports of wheat, sunflower oil, fish, and fertilizer begin to wreak havoc along already strained food supply chains in Europe.

The Food and Drink Federation ( FDF ) said higher prices will have knock-on effects on the cost of a wide range of basic goods. Wheat is used in feed, while sunflower oil is found in processed foods of various kinds, as well as for home use.

“The war in Ukraine has caused significant supply chain disruption and ingredient shortages across the food and beverage industry,” said Dominic Goudie, FDF ‘s head of international trade.

He called on the government to “mobilize the full arsenal of tools available to protect families from price hikes and support businesses during an “unprecedented period of turmoil”.

Official figures released this week showed that food price inflation is rising and increases are expected to accelerate later this year, exacerbating a cost-of-living crisis that threatens to push more than a million people into poverty.

Inflation jumped to 6.2 percent in February and is expected to exceed 8 percent by the fall, causing the worst drop in living standards since at least the 1950s.

The report indicated that rising food prices, spurred by the war in Ukraine, would hit families the most.

Russia and Ukraine account for more than 60 percent of global supplies of sunflower oil and a third of wheat exports. While Russia has continued to ship some wheat, Ukrainian exports have almost halted since Vladimir Putin launched his offensive four weeks ago.

Concerns are growing especially over supplies of vegetable oil from Ukraine, where farmers must now plant this year’s crop. Some farmers decide to sell their seeds because they don’t think they will be able to harvest them, according to Kyle Holland, an analyst at Mintec, a leading provider of food commodity pricing and analysis.

Others are expected to replace sunflowers with subsistence crops such as oats, which are vital for survival.

This means high prices and irregular supplies of some foods to consumers in Europe. Sunflower oil prices have more than doubled since the war began and Mintec estimates Europe has only three weeks of supplies left.

The total area of ​​land planted with sunflowers will be halved this year, according to a Mintec estimate.

This may cause the market to be inaccessible for a long period of time. “It will take a long time to repair the damage,” Holland said.

High prices have prompted producers to buy other oils such as rapeseed, but poor harvests have led to tight supplies. Rapeseed prices rose by 90 percent in a year. The UK government this week relaxed rules to allow food producers to replace sunflower oil with alternatives without updating the packaging.

Meanwhile, nitrogen fertilizer exports have also declined, driving up prices fivefold. The shortages threaten food production across Europe, potentially impairing the continent’s ability to make up for imports from Russia and Ukraine.

Global wheat stocks are at their lowest level since 2006 and prices are up 62 percent since January. While the UK doesn’t import much wheat directly from Ukraine or Russia, any drop in global supply has an impact.

The milk supply is also under pressure. Arla Foods, the UK’s largest dairy company, has warned that costs are rising at record rates, leaving farmers struggling to make ends meet. Arla advocates paying farmers higher wages to ensure the milk continues to flow.

- Advertisement -
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments
- Advertisement -
- Advertisement -

Latest News

0
Would love your thoughts, please comment.x
()
x