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UN / FOOD PRICES
STORY: UN / FOOD PRICES
TRT: 2:15
SOURCE: UNIFEED
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 16 MARCH 2022, NEW YORK CITY
FILE – NEW YORK CITY
1. Wide shot, UN headquarters exterior
16 MARCH 2022, NEW YORK CITY
2. Wide shot, spokesperson at dais
3. SOUNDBITE (English), Maximo Torero, Chief Economist, FAO:
"Already prior to the crisis, the international prices reach an all time high. In 2022, the FAO Food Price Index reached a new historical record, 21 percent above his higher level earlier, and 3.1 points higher than reached in February 2011. Which means that we started the conflict with a significant high prices already. In 2021, wheat exports by the Russian Federation and Ukraine accounted for 30 percent of the global market."
4. Wide shot, briefing room
5. SOUNDBITE (English), Maximo Torero, Chief Economist, FAO:
"Nearly 50 countries dependent on the Russian Federation and Ukraine for at least 30 percent of the wheat import needs. Of this, 36 countries have over 50 percent of their wheat imports coming from these two countries. For fertilizers, 55 five countries rely on the Russian Federation with an import dependency or 30% or more for [inaudible] fertilizer. Wheat is a staple food for 35% of the population. The lack of a substitute is likely to put more pressure on wheat prices."
6. Wide shot, spokesperson at dais
7. SOUNDBITE (English), Maximo Torero, Chief Economist, FAO:
"The crisis represent that challenge for many countries and especially for low income, food import dependent countries and vulnerable population. Sourcing from different regions with increase shipping, another operational cost. Prior to the conflict, FAO estimated Ukraine to export around 6 million tonnes a week between March and June 2022. Russian Federation was estimated to ship 8 million tons. This represented about 30 percent of the global wheat trade in 2021/2022, which is forecasted by FAO at 184 million tonnes."
8. SOUNDBITE (English), Maximo Torero, Chief Economist, FAO:
9. Wide shot, briefing room
"This means that hunger could increase relative to the basin between 7.6 million people into chronic undernourishment to 13.1 million people moving into chronic under nourishment."
10. Wide shot, briefing room
The global supply gap resulting from the conflict in Ukraine could push up international food and feed prices by 8 to 22 percent above their already elevated levels, the UN Food and Agriculture Organization (FAO) informed on Wednesday.
Speaking to journalists in New York, Maximo Torero, Chief Economist at FAO, noted that prior to the crisis the agency's Food Price Index had reached a new historical record.
"Which means that we started the conflict with a significant high prices already," he said.
The Russian Federation and Ukraine are among the most important producers of agricultural commodities in the world. Both countries are net exporters of agricultural products, and they both play leading supply roles in global markets of foodstuffs and fertilisers, where exportable supplies are often concentrated in a handful of countries. This concentration could expose these markets to increased vulnerability to shocks and volatility.
According to Torero, "nearly 50 countries dependent on the Russian Federation and Ukraine for at least 30% of the wheat import needs. Of this, 36 countries have over 50% of their wheat imports coming from these two countries."
The economist also said that "wheat is a staple food for 35% of the population" and "the lack of a substitute is likely to put more pressure on wheat prices."
In Ukraine, the recent escalation of conflict has already led to port closures, the suspension of oilseeds crushing operations and the introduction of export licensing requirements for some crops, all of which could take a toll on the country’s exports of grains and vegetable oils in the months ahead. It is also uncertain whether Ukraine will be able to harvest its crops during protracted conflict. Much uncertainty also surrounds Russian export prospects going forward.
According to FAO, the resulting global supply gap could push up international food and feed prices by 8 to 22 percent above their already elevated levels.
If the conflict keeps crude oil prices at high levels and prolongs the two countries’ reduced global export participation beyond the 2022/23 season, a considerable supply gap would remain in global grain and sunflower seed markets, even as alternative producing countries expand their output in response to the higher prices. This would keep international prices elevated well above baseline levels.
FAO’s preliminary assessment suggests that, as a result of the conflict, between 20 and 30 percent of the areas under winter cereals, maize and sunflower seed in Ukraine will either not be planted or remain unharvested during the 2022/23 season, with the yields of these crops also likely to be adversely affected.
In the case of the Russian Federation, although no major disruption to crops already in the ground appears imminent, uncertainties exist over the impact that the international sanctions imposed on the country will have on food exports
Globally, if the conflict results in a sudden and prolonged reduction in food exports by Ukraine and the Russian Federation, it could exert additional upward pressure on international food commodity prices to the 3 detriment of economically vulnerable countries, in particular.
FAO’s simulations suggest that under such a scenario, the global number of undernourished people could increase by 8 to 13 million people in 2022/23, with the most pronounced increases taking place in Asia-Pacific, followed by sub-Saharan Africa, and the Near East and North Africa.
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