Worsening Food Crisis Part 1/2
General environment
As stated at a recent UN meeting, we are entering a moment of unprecedented global hunger, caused by a number of reasons: climate change, severe droughts, disrupted logistics and broken supply chains, constraints due to COVID-19 and further exacerbated by conflicts in the world and in Ukraine in particular.
The recent escalation of conflicts, both in Ukraine and around the world, is greatly adding fuel to the fire. According to the Food and Agriculture Organization and the World Food Program, the number of people affected by the lack of food due to conflict has quadrupled in the last 2 years, from 400 million in 2020 to 1 billion 600 million people in 2022, 250 million of whom are on the brink of starvation.
As we said in the last Economic Review, Ukraine and parts of Russia are considered the world's "Granary" and one of the largest suppliers of fertilizers and grains in the world. They both account for over 30% of the world's grain exports and almost 80% of the world's sunflower oil exports. Ukraine alone fed 400 million people around the world and at the moment food exports from these countries have understandably stopped.
This is a huge problem for the entire world. EU countries alone bought 25 percent of grain imports from Ukraine and Russia. The situation is even more acute in the Middle East and North Africa, with Ukrainian grains accounting for 65% of Egypt's grain imports, 85% of Lebanon's, 70% of Turkey's, and from 10% to 40% of nearby countries.
Deteriorating situation
A number of key producing countries continue to impose food export restrictions to protect their domestic markets, further exacerbating the global situation.
- - Indonesia bans exports of edible oil, provoking a worsening global food crisis. Indonesia, the world's largest producer of palm oil. This year palm oil prices have increased by more than 40%.
- - Belarus has also restricted exports of staple foods to protect its domestic market.
- - Serbia has banned exports of wheat, corn, flour and vegetable oil to counter rising prices.
- - Hungary, one of Europe's most grain-rich countries, banned all grain exports.
- - Malaysia imposed export restrictions on meat and poultry.
- - In France, food vouchers (UBI) are offered in some cities as food aid for the low-income segment of the population.
- - Bulgaria also announced that it is increasing its grain stocks and restricting exports until it can make planned purchases.
- - India has banned wheat exports, which the world was counting on to ease supply restrictions caused by the war in Ukraine, saying the country's food security is at risk. Exports will still be allowed to countries that require wheat for food security needs and based on requests from their governments.
- - In Iran, a sharp increase in the price of bread provoked protests in which some stores were set on fire. The protests were triggered by cuts in government subsidies on imported wheat, which led to a 300 percent increase in the price of a number of basic flour-based products.
Graph of the growth of wheat prices.
The cost of corn has reached a 10-year record of $8 per bushel and is aiming for a historical price record.
While we were preparing this article for you, more than 23 countries have banned their companies from selling food from Kazakhstan to Kuwait, and Russia has proposed to all EAEU countries to limit grain exports, thus adding more fuel to the fire.
Keep your nose to the wind and know that Fortune, Fortune and Success always favor you when you are with us!
Always yours C.J.
All of the above is not financial advice, but only the subjective opinion of the author. If you doubt anything, do your own research and double-check the information yourself. WARNING! Information from Crypto Joker channels can change your thinking and open your eyes to what is hidden from most people. And know, there are storms the size of the Earth on Jupiter, and there are lies the size of the ocean on Earth.
