How Russia’s invasion of Ukraine is tearing apart the global food system
LONDON (BLOOMBERG) – The global food system is under threat as Russia’s invasion of Ukraine puts one of the world’s major bread baskets in jeopardy.
Here are the latest developments and their far-reaching impacts:
Food inflation
The Ukraine war threatens staple crops from Europe’s key grain-growing regions, which means escalating food prices that have already been plaguing consumers around the world could get worse, raising the threat of a full-blown hunger crisis. The United Nations warned that already-record global food costs could surge another 22 per cent as war stifles trade and slashes future harvests.
Grains are the staples that feed the world, with wheat, corn and rice accounting for more than 40 per cent of all calories consumed.
Higher shipping costs, energy inflation, extreme weather and labour shortages have made it harder to produce food. And supply is shrinking: grain stockpiles are poised for a fifth straight annual decline, according to the International Grains Council. The war in Ukraine stands to only push prices up further, sending hunger to unprecedented levels.
Global food prices are at all-time highs, with a benchmark UN index soaring more than 40 per cent over the past two years. Food insecurity has doubled in that period, and 45 million people are estimated to be on the brink of famine. Agricultural markets are also soaring. Wheat hit an all-time record in Chicago last Tuesday (March 8). Corn and soybeans are trading near multiyear highs.
Food protectionism
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