LONDON (CNN): Grain is once again leaving Ukrainian ports. The price of fertilizer is falling sharply. Billions of dollars in aid has been mobilized.
Yet the world is still in the grips of the worst food crisis in modern history, as Russia’s war in Ukraine shakes global agricultural systems already grappling with the effects of extreme weather and the pandemic. Market conditions may have improved in recent months, but experts do not expect imminent relief.
That means more pain for vulnerable communities already struggling with hunger. It also boosts the risk of starvation and famine in countries such as Somalia, which is contending with what the United Nations describes as a “catastrophic” food emergency.
“All the major causes of the food crisis are still with us — conflict, Covid, climate change, high fuel prices,” Cary Fowler, the US special envoy for global food security, told CNN. “I do think we have to prepare for 2023 being a rough year.”
The issue is on the agenda as government and business leaders head to the World Economic Forum in Davos, Switzerland this week. It will vie for attention as attendees discuss topics ranging from energy costs and maintaining global security to artificial intelligence and demographic shifts.
David Beasley, head of the UN’s World Food Programme, tweeted that the elite gathering comes at a “critical time.” His agency received $14 billion in 2022, an unprecedented sum that included more than $7 billion from the United States. That helped it deliver food and assistance to about 160 million people.
But high food prices mean that funding can’t go as far, and Russia’s war continues to generate volatility. More work also needs to be done to boost supplies of food in countries with greater needs.
“The ranks of the food insecure are growing faster than our ability to provide humanitarian assistance,” Fowler said. “We can’t get out of this crisis by supplying food aid.”
The highest food prices on record
Before Russia invaded Ukraine, the price of food was already at its highest level in a decade due to scrambled supply chains and extreme weather events, such as the worst drought in almost a century in central and southern Brazil. Record prices for natural gas — a key input to make nitrogen-based fertilizers — had also become a nightmare for farmers.
Then came the war. Ukraine normally supplies about 45 million metric tons of grain to the global market every year and is the world’s top exporter of sunflower oil. Together with Russia, it accounted for about one quarter of global wheat exports in 2019. As Russian troops blockaded the country’s ports, the strained food system was dealt another shock — this one even harder to bear.
“The Ukraine crisis has had this ongoing negative impact on world food prices and [added] even more volatility,” said Abby Maxman, CEO of Oxfam America. “The supply chains and how they flow to places like East Africa and the Horn of Africa are taking big hits.”
That drove the Food Price Index developed by the UN’s Food and Agriculture Organization to its highest annual level on records dating back to 2005, rising more than 14% compared to 2021. In 2022, the number of people grappling with acute food insecurity — meaning their access to food was so restricted that it threatened their lives and livelihoods — shot up to 345 million from 135 million in 2019.
Global food prices broke a record last year
The Food Price Index from the United Nations rose above its previous high in 2011 as Russia’s war in Ukraine, the pandemic and extreme weather pushed up the price of agricultural products.
There have been some signs of improvement. The index has dropped for nine consecutive months, and its December value was below that of one year ago.
A big factor is the sharp decline in the price of vegetable oils. Supplies are high and demand is down as the economy slows and recession fears take hold. The deal to restart Ukraine’s food exports via the Black Sea allowed it to ship more than 12 million metric tons of grain and other foodstuffs through the beginning of December. And the falling price of energy has helped bring down the cost of fertilizer.
“At the moment, things are trending in the right direction,” said Jonathan Haines, senior analyst at Gro Intelligence, a research firm.
But concerns remain, especially given that food prices appear to have stabilized at high levels.
Fertilizer remains expensive on a historical basis, and farmers have been using less to conserve costs; that could reduce crop yields in upcoming harvests. China’s rapid rollback of coronavirus restrictions means the country’s demand for agricultural products could suddenly skyrocket, lifting prices again. Plus, Ukrainian and US officials have said Russia is slow-walking inspections of ships loaded with grain at Black Sea ports, leading to backups and costly delays.
Russia “is not assisting in alleviating the food crisis in slowing down the grain inspections,” Fowler said.
Unpredictable and extreme weather also poses a risk after the eight warmest years on record. The past 12 months saw unprecedented heat in Europe, devastating flooding in Pakistan, dryness in the US corn belt and severe drought in South America linked to the La Niña phenomenon.
“We’ve been experiencing a lot of climate disruption,” Haines said. “It’s a big unknown.”
The far-reaching costs of war
Upheaval in the global food market has added to the ranks of poor and hungry people around the world, and those monitoring conditions are worried about the future.
“We really are in a moment where we’re seeing increasing poverty because of all these shocks, particularly in Africa,” said Dina Esposito, USAID’s global food crisis coordinator, who is traveling with Fowler to Malawi and Zambia this week.
Governments, still stung by the pandemic, have less bandwidth to provide assistance, especially given the rapid run-up in interest rates — which mandates heftier debt payments — and the strong US dollar, which makes importing food more expensive. Agricultural prices in local currency have gone up 142% in Malawi and 120% in Zambia since the start of 2020, according to an analysis from Gro Intelligence.
Meanwhile, countries already on the brink, such as drought-stricken Somalia, have been pushed further to the edge. Aid groups have estimated that more than 90% of wheat consumed in the country comes from Russia and Ukraine. Oxfam’s Maxman, who traveled there in September, said disruptions to food supplies were obvious in markets.
Last summer, a senior nutrition manager at a clinic run by the International Rescue Committee in Mogadishu told CNN that its caseload had spiked 80% in one month, and that it was seeing a staggering 265% increase in severe malnutrition in children under the age of five.
“It’s the compounding effects that’s hurting those least responsible for what’s happening the most,” Maxman said.