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Saturday, July 2, 2022

Food prices: how countries are using the global crisis to gain geopolitical power

There are currently 20 million tonnes of grain trapped in Ukraine’s silos, adding to the global food crisis triggered by Russia’s invasion of the country. In addition to the need to bring grain to world markets, freeing up storage space will be crucial for the country to make room ahead of the next harvest season.

Current talks between Russia and the Turkish government are focused on establishing an export corridor to ensure safe passage of grain. Its purpose is to encourage Russia to lift the blockade of Ukraine’s ports, with the Turkish Navy providing an escort for ships transporting this grain through the Black Sea.

As with vaccine diplomacy efforts seen during the COVID-19 pandemic, governments are now struggling to meet global demand with limited amounts of expensive food. But some countries are going a step further than ensuring that food is available to their own citizens, pointing to a new era of food diplomacy being used to strengthen alliances old and new.

According to the UN’s Food and Agriculture Organization’s monthly food price index, food prices in May 2022 were down 0.6% from April, but up 22.8% from the same month last year. Recent research shows that three quarters of people in the UK are concerned about the cost of food.

The situation is even worse in many low-income countries. The war in Ukraine is expected to exacerbate existing food insecurity and drive hunger in some parts of the world to the highest level of this century.

Food supply chains have been severely disrupted by the war as both Russia and Ukraine are large suppliers of major agricultural products such as wheat, barley and sunflower oil. It is also expected to have a lasting impact on the global trade in food.

However, moving food supplies out of Ukraine is not easy. Before the war, 90% of this cargo left Ukraine by sea, but Russian occupation of Ukraine’s sea ports has blocked this export route. The European Union has increased support for transport by road, rail and river barge, but it would take 10,000 river barges, or 1 million large trucks, to carry 20 million tonnes of grain. Crossing the border by road is slow and transporting freight by train into Ukraine’s neighboring countries is complicated by the different railway gauges.

Grain is being loaded into the hold of a maritime cargo vessel in Odessa, Ukraine, Odessa, 9 August 2021.
Shutterstock

food crisis solution

Even if issues of international agreements, availability and capacity of cargo ships and crew, and insurance issues are resolved, the food crisis will not be completely avoided. The Ukrainian Grain Producers Association expects the 2022 grain and oilseed crop to drop by about 40% from 2021 levels. This, along with the potential impact of drought in many countries and high input prices on agricultural production, would have disastrous consequences for the world’s food supply.

There is no shortage of fertilizers and grains, but prices and political, logistical and financial difficulties make it challenging to ship large quantities to low-income importers. In poor countries, grain and fertilizers would become unavailable to the population and limit domestic production. The food crisis is also affecting rich countries, with the EU reconsidering the timeliness of its ambitious “farm to fork” reform strategy.

In light of these challenges, many producing countries have banned the export of food. At the end of May, 10% of calories in global markets were subject to export restrictions. This is reminiscent of the ban on export of COVID-19 vaccines in 2021.

Amid a deadly wave of infections, India focused on vaccinating its population with domestically produced vaccines rather than supplying the world. There was also tension between the UK and the EU over disputes over vaccine distribution.

Vaccine nationalism in 2021 may now be followed by food nationalism. COVID-19 vaccines were distributed very unevenly, with vaccination rates in low-income countries lagging far behind those in the richest. Similar inequalities can arise as wealthy nations try to increase their food supply.

Box Printed With Covid-19 Vaccine On Factory Production Line
Countries often export shipments of vaccines to strengthen ties with other regions during the COVID-19 pandemic.
Shutterstock

diplomatic weapons

In 2021, vaccine nationalism gave rise to vaccine diplomacy. Countries export their COVID-19 vaccines to strengthen ties with some regions. For example, both China and the United States implemented extensive vaccine programs in Central and South America.

Before its ban, India provided vaccination to regional partners such as Bhutan. China and Russia showed early clout in vaccine diplomacy, while Western countries were accused of hoarding.

Similarly, 2022 has seen the rise of food diplomacy, making agricultural supply chains as political as oil and gas. Restricted supply and high demand mean that countries and blocs with food surpluses must decide where to export critical goods. For example, India has requested Bangladesh, Egypt and the United Nations World Food Program for supply of wheat.

When there is a push for influence in a region, food exports can become a diplomatic instrument in the form of “food power”. Just as the EU is eager to address the expected shortages in the Middle East and North Africa, for example, China is supporting African countries facing a food crisis.

Meanwhile, the fight is on for control over the narrative on food shortages. Russia is being accused of weaponizing food, while China has been both accused and accused of food hoarding apprehensions. The president of the African Union, Senegalese President Mackie Sall, has also blamed Western sanctions for supply chain issues.

As major world powers blame each other for their roles in driving the current crisis, distributing food in limited quantities to meet global demand will be a crucial 2022 issue.

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
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