In Yemen, the price of bread surged 35 per cent the week Russia attacked Ukraine. Wheat mills lacking grain in Lebanon have halted operations in recent months, forcing bakeries to shutter. And in Kenya, cooking oil is scarce.
As the United States and Europe contemplate their next rounds of sanctions to starve Russia of the revenue that is funding its war, there is growing concern that the fallout is fueling an alarming hunger problem around the world that will not easily be reversed.
Policymakers have been scrambling to cobble together plans to open up supply chains and provide food financing to developing countries, but the combination of rising energy costs and constrained exports from Russia and Ukraine is threatening some of the most vulnerable populations around the world.
President Vladimir Putin of Russia has embraced and exacerbated the crisis, blocking exports of food and grain from the region and using the shortages as leverage to get Western sanctions rolled back.
Top officials from the United States and Europe have so far rebuffed such offers while also debating how to extend sanctions without widening the collateral damage.
The region’s critical role in the food supply chain has meant a cascading effect, sending global food prices soaring. Much of the world’s grains and fertiliser flow from Russia, Ukraine and Belarus. Russia and Ukraine combined export about 30 per cent of the world’s wheat and 75 per cent of its sunflower oil.
Cutting off those supplies, along with the uncertainty about the duration and scope of Western sanctions, has prompted other governments to block exports as nations try to stockpile goods.
President Joe Biden said this month that he is working on a plan to build temporary silos on the borders of Ukraine and Poland so grain that Russia is blocking from moving through the Black Sea can be transported by rail to Europe and beyond.
“I’m working closely with our European partners to get 20 million tonnes of grains locked in Ukraine out onto the market to help bring down food prices'', Biden said at an AFL-CIO convention. “But it’s taking time.”
In its latest Global Economic Prospects report, the World Bank said that nearly half of the people in low-income countries are facing food shortages, which often lead to social unrest.
“There’s a severe risk of malnutrition and deepening hunger and even of famine in some areas'', David Malpass, President of the World Bank, said as he warned of global stagflation in early June.
People in emerging economies often spend the bulk of their daily budgets on food, and those expenses are climbing. According to the Food and Agriculture Organization of the United Nations, food prices in May were up by nearly 30 per cent from a year ago, pushed higher by rising cereal and meat prices.
Soaring fertiliser prices, driven by sanctions on Russia and Belarus, along with high global energy prices, are broadening the scope of food shortages by making it more expensive to produce and transport food around the world.
“Without fertilisers, shortages will spread from corn and wheat to all staple crops, including rice, with a devastating impact on billions of people in Asia and South America, too'', said António Guterres, Secretary-General of the United Nations.
The price increases are prompting new waves of protectionism. Countries such as Indonesia, India and Malaysia have restricted exports of cooking oil, wheat and chicken to insulate their domestic markets. About 20 nations have some kind of export control to limit the effect of high food prices, according to the Center for Strategic and International Studies.
The problem is particularly vexing because much of the food crisis can be attributed to Russian sabotage.
“It’s the war that is causing this to happen'', Paschal Donohoe, Ireland’s finance minister, said in an interview. “But policymakers in Europe, in America, within the G-7 are very aware of the risks that, in particular, the developing world could face with regard to food security later on in the year.”
Donohoe, who is also president of the Eurogroup, a club of European finance ministers, said policymakers are working to craft sanctions so they minimise food inflation. In the United States, the Treasury Department has issued several sanctions exemptions, or general licenses, that are intended to allow food exports to continue to flow.
Despite those efforts, some fear that efforts to punish Russia are having unwanted side effects.
The European Union enacted a new package this month that will ban the majority of Russian oil imports. To tighten the restrictions, it is also phasing in a ban on maritime insurers of Russian cargo ships, a step intended to hinder Russia’s ability to redirect its oil to other parts of the world.
As the war in Ukraine drags on and food shortages worsen, the debate over whether some sanctions relief should be on the table is likely to intensify if it would stave off famine.
Ian Mitchell, of the Center for Global Development, said Ukraine had become a global magnet for humanitarian aid to the detriment of low-income countries in the Middle East, Africa and Central America that were already facing food insecurity and now must cope with higher prices. He argued that sanctions relief should be on the table. — New York Times
Alan Rappeport
The writer is a journalist at 'NYT'
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