A new global food crisis is brewing, says the World Bank

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KUALA LUMPUR (April 10): The war in Ukraine has triggered an alarming global increase in government controls on food exports, World Bank President David Malpass has said.

In a blog post published Friday, April 8, he said it was essential for policymakers to halt the trend, which made a global food crisis more likely.

He said that in the space of a few weeks, the number of countries imposing food export restrictions had jumped by 25%, bringing the total number of countries to 35.

Malpass said food crises are bad for everyone, but devastating for the poorest and most vulnerable people.

He said it was for two reasons.

“First, the poorest countries in the world tend to be food-importing countries.

“Second, food accounts for at least half of total household expenditure in low-income countries,” he said.

Malpass said export and import controls currently encompass around 21% of global trade in wheat, for example – well below the 74% share at the height of the 2008-2011 crisis.

He said the conditions are ripe for a retaliatory cycle in which the scale of restrictions could increase rapidly.

He said trade measures are already having a visible effect on food prices.

He said Russia had imposed restrictions on wheat exports to countries outside the Eurasian Economic Union.

Malpass said smaller exporters, such as Serbia and North Macedonia, have also imposed restrictions.

“The same goes for food-importing countries like Egypt, which imports 80% of its wheat from Russia and Ukraine and is worried about re-exports.

“These measures alone cover 16% of world trade and have been responsible for a seven percentage point increase in world wheat prices.

“That’s about a sixth of the overall price spike,” he said.

Malpass said the surge in trade interventions in March could be a sign of supply disruptions to come.

He said food export restrictions imposed in March were nearly double the number of the previous two months.

He said restrictive export measures were reducing global supply, leading to higher prices.

“This triggers new export restrictions to contain domestic price pressures, generating a ‘multiplier effect’ on international prices.

“If one of the top five wheat exporters were to ban exports, the cumulative effect of these measures would be to increase the world price by at least 13% – and much more if others react,” he said. -he declares.

It’s time to defuse the danger

Malpass said a global food crisis is by no means inevitable.

“Despite the extraordinary rise in food prices of late, global stocks of the three major commodities – rice, wheat and maize – remain high by historical standards.

“The G7 recently took an important step by pledging not to impose food export bans and to use “all instruments and financing mechanisms” to strengthen global food security.

“Maintaining global food flows, especially at a time of growing economic and geopolitical tensions, should be a minimum requirement for policymakers everywhere, the equivalent of the do no harm rule,” he said. declared.

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