Heatwaves, poor harvests, supply-chain bottlenecks and disruption from war in Ukraine have sent food prices soaring this year. In response, a number of countries around the world have imposed export bans in order to protect their own national food supply, which has only added to the problem.
Export bans have affected food products from wheat and beef to palm oil, as countries scramble to protect domestic prices and maintain food security. And the scenario has been even more complicated by COVID-19-induced supply chain disruptions and environmental factors such as droughts last year.
"There is a myriad of problems, none of which would resolve themselves in any great hurry," Marc Ostwald, chief economist at ADM Investor Services International, a UK-based multi-asset brokerage firm, told Insider.
It's not the first time the world has suffered from an agricultural commodity price shock. Food inflation was a problem from 2007 to 2008 in the aftermath of the global financial crisis, where countries like Ukraine and other major grain exporters banned supplies to defend domestic prices. India and Vietnam, the biggest exporters of rice, also restricted imports to fight soaring food prices.
A similar situation is playing out now, where Ukraine again has halted wheat exports, in part because war will almost certainly disrupt the planting of the new crop this year. Indonesia has placed a blanket ban on the export of palm oil, and Argentina has blocked certain beef cuts.
These bans only stand to worsen a cost-of-living crisis, where people face surging food price inflation and rising utility bills, after a series of sanctions on Russian energy exports.
"We're at a point where prices are real high, and they don't seem to be going down any soon. As long as prices are high, there's going to be a temptation for some countries to try to help their consumers by keeping prices low," Joseph Glauber, a researcher at the International Food Policy Research Institute told Insider.
Experts also at IFPRI point out that more food export bans "tend to be contagious, as other exporting countries follow suit and implement their own bans," suggesting further measures may be on the horizon.
Here are the key agricultural exports that have been restricted in the last year and what it's meant for food prices. Industry experts also tell Insider what commodities could be banned next.
Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
One of the world's only 5-star airlines seems to be considering asking business-class passengers to bring their own cutlery
Experts warn of rising temperatures in Bengaluru as Phase 2 of Lok Sabha elections draws near
Axis Bank posts net profit of ₹7,129 cr in March quarter
7 Best tourist places to visit in Rishikesh in 2024
Next Story