by Yusuf Khan
The United Nations is warning of significant risks to food security around the world, especially in poor countries, as rising food and fertilizer prices put further pressure on governments to secure supplies.
The United Nations Food and Agriculture Organization said in its latest report on Friday that the global food import bill is projected to rise to an all-time high of $1.94 trillion in 2022, up 10% from the previous year, fueled by war supplies. concerns have been pushed over. Climate change and economic instability.
“Worryingly, many economically weaker countries are paying more while getting less food,” the UN FAO said in its Food Outlook report, referring to the deteriorating condition of importing countries.
New data shows how much countries are paying for their food this year with a slowing global economy and rising tensions over food security from the currency’s depreciation against the dollar. Countries are unable to import as much food as they were in earlier years amid high prices.
The UN FAO said increased climate variability and geopolitical tensions were the two biggest catalysts for food-security concerns.
A devastating heatwave in Europe severely hampered grain production, with subsequent droughts causing corn production to fall to a 15-year low. Flooding reduced rice-crop yields in Pakistan and China, while uneven weather patterns in the US hampered wheat production.
This comes on top of significant disruptions to Black Sea grain and fertilisers, with farming and exports heavily damaged by the war in Ukraine and subsequent tensions over shipping in the region. The UN FAO said world wheat trade is expected to fall 1% year-on-year due to a lack of exports coming from the region as well as rising protectionism from India over domestic supplies.
One of the biggest issues that emerged from the war in Ukraine was that poor countries in the Middle East and North Africa were most likely to be affected. These are heavily import dependencies and are further weakened by the depreciation of currencies against the dollar.
Fertilizer production has also been a major concern. The United Nations FAO said that the world agricultural input import bill is projected to reach a new high of $424 billion in 2022, representing a 48% increase in costs compared to 2021, 86% of which are high energy and fertilizers. with the fall in prices.
The UN FAO said it is likely that poorer countries will feel the most of this stress, and will have less fertilizer use – reducing productivity and total production. It further added that “higher world fertilizer prices are likely to continue through 2023, with negative repercussions for global agricultural production and food security.”
Earlier this year, fueled by the war in Ukraine, food prices have begun to settle after hitting an all-time high, with the UN FAO’s price index in October at 135.9, down from 159.7 in March.
However, October readings were largely unchanged from September as concerns about the safety of the Black Sea Grains Initiative led to a jump in grain prices during the month, keeping the market volatile. The UN FAO’s grain price index stood at 152.3 in October, up 11% from a year earlier.
Write to Yusuf Khan at [email protected]
Credit: www.marketwatch.com /