Food protectionism on the rise

08 June 20223 min reading

The Russia-Ukraine conflict has severely affected food production, sending prices soaring worldwide. It has also triggered protectionism of food products in many countries. After India, major EU food exporting nations such as Hungary have halted the export of certain crops. “We have about 22 countries now with 41 export restrictions or prohibitions on food,” said Ngozi Okonjo-Iweala, the head of the World Trade Organisation.

The global supply shortage has already contributed to a spark in wheat prices, which rose 40% between February and April 2022.  As global food prices hit record highs, more countries are resorting to protectionism to safeguard their own supplies. The economic instability and food insecurity triggered by the invasion have so far pushed 22 nations to impose 41 restrictions or prohibitions on exports of wheat, maize, and other staples.

Global food markets are extremely concentrated, both in terms of supplies and reserves. Seven countries make up 86% of wheat exports, while three countries hold 68% of the world’s wheat reserves. The figures are similar when it comes to coarse grains, corn, rice and soybean. Russia and Ukraine supplied about 30% of the world's wheat and barley before the war. Thirty-six countries, including some of the world's most vulnerable and impoverished, relied on them for more than half of their wheat imports.

Russia either banned or limited sugar, grain, and edible oil exports, while Kazakhstan also moved to bar the exports of wheat and flour until June 15. China, the world's second largest economy, has also introduced protectionist policies. The country, which had previously banned the export of phosphate fertilizers, started increasing its food stocks, especially grains.

With the start of the Russia-Ukraine war, Argentina decided to stop exports of soybean oil and soybean pulp. Hungary stopped exports of grain; Algeria edible oil, sugar, and wheat; Egypt legumes, peanuts, peas, and beans; Cameroon rice, maize, and corn; and India wheat. Ghana and Uganda are among several African countries banning the export of grains and other farm produce.

Protectionist policies risk causing a crisis in access to food, especially in Africa and the Middle East, with leading institutions making negative predictions about world trade. 

On April 13, 2022, the heads of the World Bank Group, International Monetary Fund, United Nations World Food Programme, and World Trade Organization released a joint statement calling on the international community for urgent action to address food insecurity, to keep trade open and support vulnerable countries, including by providing financing to meet the most urgent needs.

Globally, hunger levels remain alarmingly high. In 2021, they surpassed all previous records as reported by the Global Report on Food Crises 2022, with close to 193 million people acutely food insecure—nearly 40 million more people than during the previous high reached in 2020.

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