Business leaders and policymakers at the World Economic Forum (WEF) have warned of a rise in protectionist measures amid a growing food crisis which is likely to exacerbate the situation and may cause a wider trade war.
These concerns have resulted in appeals for negotiations to avert an all-out trade war as protectionism threatens to fully materialize and worsen the supply shock caused by Russia’s military operations in Ukraine.
According to the World Bank, global food prices are expected to remain high through to the end of 2024 in part due to the shock from Moscow’s operations.
Food prices are expected to rise by 22.9 percent this year, due to a 40 percent rise in prices of wheat. Russia and Ukraine account for about 30 percent of global wheat exports.
India, the world’s biggest producer of sugar and the second biggest exporter behind Brazil, will limit exports of sugar, for the first time in years, between June 1 and October 31.
However, India’s Minister of Commerce and Industry Piyush Goyal said their export regulation should not affect global markets.
Malaysia has also opted to restrict exports of chicken to neighboring countries with the government arguing its priority was its own people.
Elsewhere, Indonesia, the world’s largest palm oil exporter, will do away with a subsidy on bulk cooking oil and replace it with a price cap on the raw materials for local refiners.
Stakeholders have expressed concern about the impact of the looming situation especially on developing countries whose populations spend close to half of their income on food.
The executive director of the UN World Food Programme, David Beasley, warned that the world was facing the worst humanitarian crisis since World War Two.
“We’re taking food from the hungry to give it to the starving,” Beasley said during a panel session at the WEF.
Beasley, who had been warning of a global food crisis, added that a ‘perfect storm’ compounded by the situation in Ukraine meant food availability problems could affect everyone.