Global food prices are surging at the fastest pace ever as the war in Ukraine chokes crop supplies, piling more inflationary pain on consumers and worsening a global hunger crisis.
The war has wreaked havoc on supply chains in the crucial Black Sea breadbasket region, upending global trade flows and fuelling panic about shortages of key staples such as wheat and cooking oils. That’s sent food prices -- which were already surging before the conflict started -- to a record, with a United Nations’ index of world costs soaring another 13% last month.
That helped prices round out a seventh straight quarterly gain, the longest such run since 2008.
Ukraine’s ports are closed, and many vessels are avoiding the region, which accounts for about a quarter of all grains trade. Farmers in Ukraine, the top sunflower-oil exporter, are expected to drastically cut crop plantings and the nation is struggling to export supplies already harvested. Elsewhere in the world, high energy and fertiliser prices are raising food-production costs, which is feeding through to bigger grocery bills or threatening output.
The food price rally is felt most in poor countries where groceries make up a large share of consumer budgets -- and the fallout from Russia’s invasion has sent costs of basic foods like bread soaring. The United Nations’ World Food Programme recently said expensive staples in import-dependent Middle Eastern and North African nations are putting people’s resilience at a “breaking point.”
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The UN’s Food and Agriculture Organization’s gauge of global prices has jumped more than 50% since mid-2020, eclipsing levels seen in 2008 and 2011 that contributed to global food crises.
According to FAO, world food prices soared to a new record high in March as the war in Ukraine caused turmoil in markets for staples grains and edible oils.
The agency's food price index, which tracks the most globally traded food commodities, averaged 159.3 points last month versus an upwardly revised 141.4 for February.
The February figure was previously put at 140.7, which was a record at the time.
Russia and Ukraine are both major exporters of wheat, corn, barley and sunflower oil via the Black Sea, and Moscow's six-week-old invasion of its neighbour has stalled Ukrainian exports.
FAO warned last month that food and feed prices could rise by up to 20% as a result of the conflict in Ukraine, triggering a jump in global malnourishment.
That is bad news for the world’s hunger problem. Cost increases stemming from the war and resulting sanctions on Russia will -- without action -- push more than 40 million additional people into extreme poverty, according to an analysis published last month by the Center for Global Development, a non-profit think tank whose funders include Bloomberg Philanthropies.
FAO also cut its estimate of world wheat production in 2022 to 784 million tonnes on Friday from a forecast of 790 million last month as it factored in the possibility that at least 20% of Ukraine's winter crop area would not be harvested.
It lowered its projection of global cereals trade in the 2021/22 marketing year as disruption to Black Sea exports were seen as only being partially offset by increased exports from India, the European Union, Argentina and the United States.
Aside from the food-supply risks associated with the war in Ukraine, farmers around the world continue to contend with severe weather events and the impact of climate change. For example, the worst drought in decades is causing millions of livestock to die in the Horn of Africa, while global warming is making food insecurity more severe in places like Afghanistan.
