The prices of palm oil, wheat and corn have fallen back to levels seen before Russia invaded Ukraine, easing fears of a global food crisis and proving, once again, that high prices are the best cure for high prices.
But how much damage has already been done? In a recent report, the UN says the number of people going hungry worldwide rose to 828 million last year, an increase of about 46 million from the previous year. The Guardian quotes the director of the UN World Food Programme as warning that the food crisis will result in “global destabilisation, starvation, and mass migration on an unprecedented scale.” He adds that 50 million people in 45 countries are just one step from famine.
Brazilian fertilizer imports jumped 18.6 per cent in June to reach 4.15 mln mt, suggesting that the country’s farmers will have adequate supplies for summer crops.
Turkey’s president is close to brokering a deal between Russia and Ukraine to reopen Black Sea shipping lanes to grain exports from Ukraine (as opposed to Ukrainian grain exports from Russia).
Ukraine is trying to convince Turkey to arrest vessels that it believes carry stolen grain. There were reports early in the week that Turkish authorities had detained one ship, but they have since allowed it to leave port. Ukraine summoned the Turkish ambassador to complain.
The FT writes that annual food inflation in Turkey is 80 per cent. The newspaper warns, “There is no government that an empty cooking pot cannot bring down.”
Ukraine’s government has unveiled a $5 billion plan to improve road, rail and border checkpoints for the country’s agricultural exports. The country has appealed for private financing for the scheme. Meanwhile, Romania has reopened a Soviet-era rail line, and the Polish port of Gdansk is upping its throughput of Ukrainian grain.
Japan has donated $17 million to the UN FAO to help Ukraine store crops in plastic sleeves and modular storage containers. Ukraine still has 18 mln mt of last year’s harvest in storage, and the country is expecting to harvest another 60 mln mt in the current season. Around 30 per cent of its granaries are full as the harvest picks up pace.
Meanwhile, Russia is trying to convince Africa that the war is not responsible for the continent’s food shortages.
UK farmers may have no choice but to leave crops unpicked this harvest due to a shortage of foreign workers. The situation could lead to ‘catastrophic food waste’. UK food exports to the EU have fallen significantly since Brexit.
The WWF has called for a transformation of the UK’s food system, arguing that farmers use 40 per cent of the country’s arable land to grow wheat and barley to feed farm animals instead of people.
Barry Callebaut has suspended production at its manufacturing site at Wieze in Belgium after detecting salmonella. Ferrero recently faced a similar problem at Arlon in Belgium.
On the environmental front, Dutch police have fired on farmers protesting nitrogen emission cuts that could require farmers to use less fertilizer and reduce their livestock numbers.
Cargill is equipping some of their vessels with sails to see if they can cut GHG emissions. Researchers have found that feeding cows asparagopsis, a seaweed native to Australia, cuts cows’ methane emissions by 90-95 per cent. The FT asks what carbon labelling on food packaging might mean for the sector.
Finally, wheat lovers may be interested in the recent book “Oceans of Grain”, which examines the role of wheat in the rise and fall of empires.
Click here for Bloomberg’s excellent weekly roundup of their food and agriculture stories.
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