Food insecurity will rise sharply by November 2022

By Dr Gyan Pathak

There is a 95 percent chance that the number of people facing food insecurity will rise to between 142 million and 243 million by November, from about 1.6 billion in mid-May. Furthermore, upward pressure on food prices due to export bans by several countries, including India, may make the humanitarian cost much worse.

A report titled “Food Security and the Gathering Storm” prepared jointly by Eurasia Group and Devry BV Sustainable Strategies has said that in the last three months, the Russian invasion of Ukraine has shocked agricultural markets, bringing with it the problems of high food inflation and the increase in world hunger. in focus. Even before the war, hunger levels had already surpassed all previous records in 2021, that close to 193 million people are acutely food insecure and in need of urgent assistance in 53 countries and territories.

After matching Gro Intelligence estimates of the number of people worldwide who are food insecure, at risk of extreme poverty and on the verge of famine according to World Bank and World Food Program definitions, this report has said that the number of people living in extreme poverty—on less than $2.29 a day—could rise by 103 million-201 million from just under 1.1 billion today. Lastly, the number of people on the brink of famine, or those facing the greatest degree of deprivation, could rise by 3.5 million-6.9 million, from around 49 million. Even in the most optimistic scenario of a short-term ceasefire in Ukraine, Gro Intelligence would expect the people at risk to decline only modestly over the next five months.

The war is already affecting food products in various ways, and this report highlights several key transmission channels. The first channel is through the reduction of exports from the Black Sea region. Russia and Ukraine together produce 14% of world wheat supplies and 29% of all wheat exports. The two countries account for 14% of world barley production and a third of world barley exports. They also contribute 17% of world corn exports. Additionally, Russia and Ukraine are key to vegetable oil markets, which have faced tight supplies for nearly two years. Almost 80% of all sunflower oil exports come from the Black Sea region. In addition to the war, other factors have also aggravated the problem, such as a combination of political measures, such as export restrictions, sanctions and counter-sanctions, which prevent food and fertilizer sales.

The second channel is through the prices and availability of chemical fertilizers. Russia is the world’s largest exporter of nitrogen fertilizers, the most widely used type of fertilizer. And Russia and Belarus are major exporters of potash, the main source of potassium-based fertilizers. Since the start of the pandemic, global fertilizer prices have increased by more than 230%, according to the IMF’s Global Fertilizer Price Index, and for some types of fertilizers and components, prices have risen much more. The war has exacerbated a preexisting fertilizer crisis, as the price of natural gas, a critical ingredient for nitrogenous fertilizers, has risen to new highs.

The third channel is through higher energy costs. Volatile energy prices can drive up food prices through higher costs for farmers and agricultural processes and by increasing transportation and input costs for agricultural products. The fourth channel is through shipping and logistics, conditions for which were already tense before the war, but the conflict has introduced new complications.

These conflict-induced threats compound long-standing challenges to food systems associated with both excessive post-harvest losses and climate change and sustainability. The hurricane of hunger will hit a world food system that sits on very shaky foundations. Rising average temperatures and more frequent extreme weather events are increasingly threatening agricultural yields, especially on the 44% of the world’s cultivated land that is in areas already classified as drylands. Rising input costs will certainly dampen the production response in some parts of the world.

In these scenarios, emerging markets, especially those with large populations of the urban poor, will bear the heaviest burden. Precarious food supplies and food inflation increase the risk of mass migration, social unrest and resource-driven conflict, as well as the proliferation of malicious non-state actors. To anticipate threats, some countries are taking protectionist measures to secure domestic food supplies, magnifying global price shocks. At the time of writing, global grain and oilseed markets are facing renewed pressure from India’s recent decision to severely limit its wheat exports and Indonesia’s policy to ban palm oil shipments. If other leading food producers do the same, the upward pressure on food prices will be greater and the humanitarian cost much worse.

In South Asia, political instability caused by food inflation and economic malaise are already rocking Sri Lanka and Pakistan. India is also heavily dependent on Russia and Ukraine for fertilizers, vegetable oils, and some other food products. India has prioritized domestic needs over the imperative to keep the food trade open.

In India, early and severe heatwaves hit the country’s main wheat-producing states in April, sparking farm fires and leading to up to 35% of crop losses. These high temperatures have forced the country to focus on domestic demand, derailing Prime Minister Narendra Modi’s plans to “feed the world”; Wheat exports from India were suspended on May 13, although according to comments from the Indian government, this is not a complete ban as exports will still be allowed on humanitarian grounds.

India’s wheat exports reached 7.8 million tonnes in fiscal year 2021-2022 (ending March), an all-time high, largely due to the Ukraine crisis. But the current severe heat waves are likely to reduce agricultural production, especially wheat, and officials lowered their output forecast to 105 million tonnes, about 6 million tonnes less than February estimates, marking the first decline. production potential in five years. A low yield, coupled with skyrocketing food inflation, would force officials to focus on domestic demand.

These factors have derailed Modi’s recent offer to supply the world with India’s surplus wheat, forcing his government to abruptly restrict wheat exports on May 13, the report highlights. While the Modi government remains well positioned, rising food prices in the long run could worsen social tensions. Modi is also keen to get inflation under control before he begins the first campaign efforts next year ahead of the 2024 election.

However, competitive and protectionist responses to food safety concerns are sure to do more harm than good, the report warns. (IPA Service)

Food insecurity will rise sharply by November 2022 first appeared on IPA Newspack.

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