(Jamaica Observer) World leaders are pushing for action to address food security as global food prices continue on an upward trajectory and vulnerable nations face tightening supplies.

In a joint statement the heads of the World Bank Group (WBG), International Monetary Fund (IMF), United Nations World Food Program (WFP) and World Trade Organization (WTO) identified the ongoing novel coronavirus pandemic and the Russia-Ukraine war as “compounding crises” that have contributed to a shortage in food supplies and increase in prices.

“The fallout of the war in Ukraine is adding to the ongoing COVID-19 pandemic that now enters its third year, while climate change and increased fragility and conflict pose persistent harm to people around the globe. Sharply higher prices for staples and supply shortages are increasing pressure on households worldwide and pushing millions more into poverty,” they noted.

The statement added that the surge in food prices pose a threat mainly to the world’s poorest countries whose consumption largely comprise food imports and that middle-income countries are also vulnerable since they host a majority of the world’s poor.

According to World Bank estimates, each percentage increase in food prices pushed 10 million people into extreme poverty globally.

In the same vein, the Food and Agriculture Organization of the United Nations (FAO) shared that the conflict in Eastern Europe has pushed FAO’s Food Price Index to an all-time high, hitting the vulnerable most. FAO simulations indicate further that the conflict could result in as many as 13.1 million more people going hungry between 2022 and 2026.

UK-based publication The Spectator indicates that the FAO food price index rose 13 per cent in March to stand a third higher than a year ago. Interruptions in wheat supplies from Ukraine and Russia have driven cereals prices up 17 per cent and vegetable oils by 23 per cent, it added.

HIGH FERTILISER PRICES
In the meantime, higher fertiliser prices have curbed the outlook of future harvests globally, with key exporter Russia excluded from the supply chain. In 2020, the Eurasian country was the top exporter of nitrogen fertilisers, the second-leading supplier of potassium, and the third-largest exporter of phosphorous fertiliser. However, sanctions from the US, European and Asian governments on Russian commodities, including oil and petroleum by-products, have intensified the shortage of fertiliser supplies to the global market.

“The rise in food prices is exacerbated by a dramatic increase in the cost of natural gas, a key ingredient of nitrogenous fertiliser. Surging fertiliser prices along with significant cuts in global supplies have important implications for food production in most countries, including major producers and exporters, who rely heavily on fertiliser imports. The increase in food prices and supply shocks can fuel social tensions in many of the affected countries, especially those that are already fragile or affected by conflict,” the joint statement outlined.

What’s more, Russia and Ukraine play import roles in the global food market with some 50 countries relying on them for at least 30 per cent of wheat.

Global Trade Review points out that since the war prices have soared across agricultural commodities to include wheat, barley, maize and sunflower oil, and fuels — notably crude oil and natural gas. Moreover, food prices will continue to remain high due to high transportation costs, limited container availability and ongoing disruption due to COVID-19, particularly in China’s largest port, Shanghai.

“The war can have multiple implications for global markets and food security,” FAO Director-General QU Dongyu said at a Group of 20 (G20) meeting of Finance Ministers and Central Bank Governors in Washington last week Wednesday.

CALL TO ACTION
In response to the dangers of the rising food prices, WBG President David Malpass, IMF Managing Director Kristalina Georgieva, WFP Executive Director David Beasley and WTO Director General Ngozi Okonjo-Iweala have proposed actions to provide emergency food supplies and deploy financial supply support to help the most vulnerable household and countries. Such actions, they said would facilitate “unhindered trade” and boost investment in sustainable food production and nutrition security.

In particular, they have called on the international community to provide grants to countries with the most urgent financing needs.

“We are committed to combining our expertise and financing to quickly step up our policy and financial support to help vulnerable countries and households as well as to increase domestic agricultural production in, and supply to, impacted countries. We can mitigate balance of payments pressures and work with all countries to keep trade flows open. In addition, we will further reinforce our monitoring of food vulnerabilities and are quickly expanding our multi-faceted policy advice to affected countries guided by the comparative advantages of our respective institutions,” the leaders stated.

“We also urge the international community to help support urgent financing needs, including through grants. This should include financing of immediate food supplies, safety nets to address the needs of the poor, and for small farmers facing higher input prices. We also urge all countries to keep trade open and avoid restrictive measures such as export bans on food or fertilizer that further exacerbate the suffering of the most vulnerable people. It is especially important not to impose export restrictions on humanitarian food purchases by the UN’s World Food Program,” they added.

FAO General Director QU Donyu has likewise called on the international community to fund a Food Import Financing Facility (FIFF) to help poorer countries stymie the impact of the global food price increases. Along with complementing existing mechanisms in the UN system, the fund aims to facilitate improvements in agricultural production and productivity, as well as increase future resilience through investments in sustainable agri-food systems.