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How Global Food Crises Work

As if the immediate food shortages created by Russia’s war in Ukraine were not bad enough, the disruption to this year’s harvest means that the problem will become even more acute in the fall and winter. Judging by similar episodes in the recent past, widespread social unrest is sure to follow.

MUNICH – The war in Ukraine has led to an explosion in global food prices. Before Russia’s invasion, Ukraine accounted for 10% of global exports of wheat, 13% of barley, more than 50% of sunflower oil, 5% of rapeseed oil, and 15% of corn. But these deliveries have now been disrupted on a massive scale, because Russia is blockading Ukrainian ports and bombing its grain storage facilities. In April, the global FAO food price index was already 30% higher year on year, and 62% higher than in 2020 on average. And threats to this year’s harvest mean that additional price spikes are looming.

Higher food prices affect consumers all over the world. But poor countries are especially vulnerable. Because they already must spend the lion’s share of their income on food, they simply cannot compete with other countries when prices rise. Increased poverty, hunger and starvation, and widespread protests will become inevitable.

The 2007 “tortilla crisis” offers a preview of what awaits us. Owing to state subsidies to encourage production of bioethanol fuel in the United States and other countries, the supply of corn available for use as food and animal feed had been gradually decreasing. As a result, corn prices doubled between the winters of 2005-06 and 2006-07, and tortillas became 35% more expensive. In January 2007, hunger protests erupted in Mexico City, because people could no longer afford to buy tortillas.

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