Global Food Price Hike


World food prices leaped nearly 13% in March and hit a new record, with the war in Ukraine causing turmoil in grain markets essential oils and edible oils, according to the UN agency Food and Agriculture Organization (FAO). Over the past three years, Russia and Ukraine combined, accounted for around 30 per cent and 20 per cent of global wheat and maize exports, respectively. FAO’s newly released Cereal Supply and Demand Brief estimates that at least 20 per cent of Ukraine’s winter crops that were planted, may not be harvested. But it also points to a worldwide cereal production of 2,799 million tonnes, up slightly from 2020, with rice production reaching an all-time high of 520.3 million tonnes. And global cereal use in 2021-22 is projected to reach 2,789 million tonnes, including a record level for rice, with increases also expected for maize and wheat. Global cereal stocks are forecast to rise by 2.4 per cent by the end of this year, from their opening levels, largely due to higher wheat and maize stocks in Russia and Ukraine, on account of lower expected exports. FAO lowered its forecast for world trade in cereals in the current marketing year to 469 million tonnes, marking a contraction from the 2020-21 level, largely due to the war in Ukraine and based on currently available information. The cost of fertilisers has increased by almost 30 percent in many places of this region due to the supply disruption that we see provoked by a crisis in Ukraine. The World Food Program has appealed for $777m to meet the needs people. To address the needs of food-importing countries, the FAO was developing a proposal for a mechanism to alleviate the import costs for the poorest countries. The proposal calls for eligible countries to commit to added investments in their own agricultural productivity to obtain import credits to help soften the blow.

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