Following Russia’s withdrawal from the grain agreement and India’s restrictions on some rice shipments, there are new dangers for the world food price.
According to the UN Food and Agriculture Organisation, after Russia withdrew from a wartime agreement allowing Ukraine to sell grain to the globe and India limited part of its rice shipments, global prices for food commodities like rice and vegetable oil have increased for the first time in months.
The FAO reported on Friday that higher prices for rice and vegetable oil were the main drivers of the 1.3 percent increase in the food price index, which measures monthly changes in the prices of regularly traded food items internationally. It marked the index’s first increase since April, when increasing sugar prices caused a little increase for the first time in a year.
Since reaching all-time highs during Russia’s invasion of Ukraine last year, commodity prices have been declining. Due to their prominence as suppliers of affordable food items including wheat, barley, sunflower oil, and other commodities, particularly to countries in regions of Africa, the Middle East, and Asia where millions of people are suffering from hunger, disruptions in their supplies from the two countries intensified a global food crisis.
The effects of such price shocks, which boosted inflation, poverty, and food insecurity in developing countries that depend on imports, are still being felt around the world.
After Russia pulled out of a treaty mediated by the UN and Turkey that offered security for ships transporting Ukrainian agricultural products via the Black Sea in the middle of July, there are now new hazards. Wheat and maize prices on international markets have been fluctuating along with Russian strikes on Ukrainian ports and agricultural infrastructure.
According to FAO Chief Economist Maximo Torero, global wheat prices increased by 1.6% in July compared to June, marking the first increase in nine months.
More concerning is India’s trade restriction on various non-Basmati white rice varieties, which has led to global hoarding of the essential food. Late last month, limitations were put in place as a stronger-than-expected El Nio brought warmer, drier weather to portions of Asia, which was predicted to hurt rice output.
According to the FAO, rice prices increased by 2.8% from one month earlier in July and by 19.7% this year to reach their highest level since September 2011.
More costly rice “raises significant food security concerns for a large swath of the world population, especially those that are most poor and who dedicate a greater share of their incomes to purchase food,” the organisation said in a statement.
Sub-Saharan Africa will have particular difficulties since it imports a lot of rice, Torero told reporters.
Even more abruptly, the FAO tracked price increase for vegetable oil, which rose 12.1% in July over June after decreasing for seven straight months. Following “renewed uncertainties” regarding supplies following the termination of the grain deal, the organisation cited a 15 percent increase in sunflower oil prices.
