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Food Security Update | World Bank Response to Rising Food Insecurity

Domestic food price inflation remains high around the world. Information from the latest month between October 2022 and February 2023 for which food price inflation data are available shows high inflation in almost all low- and middle-income countries, with inflation levels above 5% in 94.1% of low-income countries, 86% of lower-middle-income countries, and 87.0% of upper-middle-income countries and many experiencing double-digit inflation. In addition, about 87.3% of high-income countries are experiencing high food price inflation. The countries affected most are in Africa, North America, Latin America, South Asia, Europe, and Central Asia.

The agriculture, and cereal price indices closed 2% and 5% lower, respectively, compared to two weeks ago, while the export price index closed at the same level. Maize, wheat, and rice prices all closed lower compared to two weeks ago i.e., their prices were 6%, 7%, and 2% lower, respectively. On a year-on-year basis, maize and wheat prices are 15% lower, whereas rice prices are 19% higher. Compared to January 2021, maize and wheat prices are 24% and 7% higher, respectively, while rice prices are 3% lower. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)

The March 2023 edition of the Agricultural Market Information System (AMIS) Market Monitor underscores the uncertainty hanging over agricultural markets as the war in Ukraine continues. Reduced Ukrainian production suggests that other countries will need to plant additional grains and oilseeds to help rebuild global stocks and ease prices. Although fortunate weather and a strong producer supply response has kept market prices from returning to early 2022 levels, tight supplies will mean greater price volatility, especially during unpredictable periods such as cropping cycles in the northern hemisphere. Uncertainty surrounding the renewal of the Black Sea Grain Initiative will also keep markets in turmoil.

Global food prices, despite having fallen from historic peaks, remain high and that new export restrictions could send prices soaring again. One year after Russia’s invasion of Ukraine, many of those export-limiting measures have lapsed, and high prices mostly reflect broad global inflation, but the number of restrictions remaining in place is still troubling; 101 export restrictions—including quotas, licenses, and outright bans—are still being enforced, contrary to World Trade Organization principles that the limits should be temporary. It has been estimated that those restrictions covered more than 11% of global food trade in 2022, with export bans alone responsible for 3.8%. Although countries with a small share of food exports account for most of the remaining restrictions, even those are causing price distortions and should be lifted.

One year after Russia’s invasion of Ukraine, the International Food Policy Research Institute (IFPRI) reviewed experiences of the past year and remaining uncertainties about food security in the future. The war in Ukraine jeopardized more than one-third of world wheat trade, 17% of world maize trade, and almost 75% of world sunflower trade, causing prices of wheat futures to jump almost 60% within a week of the war’s outbreak; corn and soybean prices were up more than 15%. Although the world faced the possibility of another food price crisis, the worst-case scenarios for agricultural trade and food security were largely averted, with prices falling back to pre-war levels by August 2022 because of efforts such as the partial re-opening of ports through the Black Sea Grain Initiative and an increase in global humanitarian efforts to mitigate the impacts of the war. As Russia’s invasion of Ukraine continues, uncertainty remains in agricultural markets…

According to the Global Report on Food Crisis 2022 Mid-year Update, up to 205 million people are expected to face acute food insecurity and to be in need of urgent assistance in 45 countries.

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