The war could see food costs rise by $60m © Pierre Crom/Getty Images
The war could see food costs rise by $60m © Pierre Crom/Getty Images

Global food prices 'hell on earth' following Russia-Ukraine war

8 March 2022

Food prices will rise even higher after already reaching 10-year highs following the pandemic, according to the United Nations (UN). 

David Beasley, executive director of the UN’s World Food Programme, said Russia’s war on Ukraine added to a pre-existing “perfect storm” on global food supply chains caused by Covid-19, which could leave millions of the world’s poorest at risk of starvation due to extreme food price inflation. 

“You’ve gone from Ukraine being a breadbasket to now literally having to hand out bread to them. It’s just an incredible reverse of reality that you'd never have thought would happen,” he told the BBC World Service. 

He said the number of people at risk of starvation grew from 80m in 2018 to over 276m currently – which is set to increase following the conflict. 

The conflict could result in a $60m increase in food costs because of supply chain disruption, oil prices, and food pricing, he warned.

Beasley said while there won’t necessarily be “supply chain problems” or shortages of wheat, he said the war will result in “extreme” price inflation. 

“With Ukraine being the breadbasket of the world and the impact that is going to have on the global economy and supply chain disruption for that entire region, you just created a crisis on top of a crisis on top of a crisis. Just when you think hell on earth can't get any worse, it's getting worse,” Beasley continued.

Ukraine is vital for global food supply chains, with 30% of global wheat worldwide comes from the region, as well as 80% of all the sunflower oil.

Lebanon and Tunisia both receive around 50% of their grain from Ukraine. 

Yemen – which has been a warzone since 2014 – is reliant on foreign importers for almost all of its wheat, with over a third of the country’s wheat coming from Russia and Ukraine, according to The Observatory of Economic Complexity. The country imported ​​$317m of wheat from Russia, and $70.2m from Ukraine in  2019.

Australian prime minister Scott Morrison warned in a speech that the country was being impacted by rising food and gas prices. 

“Food and grain prices are rising, which will pose challenges to lower income economies, including many in our own region,” he said.

“Commodity price rises will be the most obvious transmission channel to Australia. Petrol prices in Australia have risen, like they are elsewhere. 

“We are not immune from the negative impacts of Russia's invasion of Ukraine on global growth as well.”

Minette Batters, president of the UK National Farmers' Union, said the conflict was also impacting on fertiliser prices, which will drive up prices for UK farmers. 

She said: “Whilst we all hope that the end is in sight for the pandemic, we are potentially at the start of another crisis around the cost of living and inflation. 

“It’s a stark fact in the 12 months to November 2021, the price index for agricultural inputs increased by over 18%. Many of us are experiencing inflation in fertiliser of around 200%.

“We must share this pain throughout the food chain. It cannot be left for farmers and growers to take the hit.”

Fertiliser prices have increased to almost £1,000 a tonne, up from about £650 last week, due to the surge in gas prices.

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