World Food Programme warns of looming food availability crisis in 2023
31 Aug 2022 --- Concerns are growing that the global food crisis has not yet reached its peak, with predictions that inflation will continue to creep up and by next year, the crisis will become about affordability not availability.
The food-assistance branch of the United Nations, the World Food Programme (WFP) warns that 2023 might be even worse than the crippling events of 2022, underscored by food prices remaining stubbornly high.
Currently, it is food prices that are the challenge, not food availability, according to WFP’s chief economist, Arif Husain. But for how long?
“There is food available but the prices are really high,” he stresses.
“But if we are unable to deal with certain things like the availability of fertilizer, not just it being available but available at an affordable cost, then this crisis will turn into a crisis of availability, come next year.”
It has been a very difficult year for farmers as the cost of fertilizers doubled this year, according to a UN report. Those costs are then passed onto the consumer, resulting in higher prices across a breadth of food products.
Affordability crisis
Husain admits that while food commodity prices are retreating, it is “simply not enough to dent food inflation.”
“Hundreds of millions of people remain crippled by the toxic combination of tumbling currencies and high food inflation,” he highlights.
High food inflation is an immovable object despite the steep decline in food commodity prices appreciated in the latest July FAO Food Price Index data.
USDA economist Matt MacLachlan also warns that peak food inflation is not yet here, as uncontrolled food prices taint many countries’ inflation numbers.
High fertilizers costs drive up food prices.The WFP chief economist showcases the cases of Lebanon – 240% food inflation, – Zimbabwe – 309% food inflation,– Venezuela – 155% food inflation – and Sudan – 149% food inflation – as some of the most worrisome.
Husain explains that food inflation together with currency value loss – of for example, 83% in Zimbabwe or 44% in Sri Lanka – is a “toxic combination,” a lethal cocktail that, as weak currencies, make purchasing food in international markets an unaffordable endeavor.
“We are certainly not out of the woods when it comes to the consequences of the global hunger crisis of our lifetimes,” underscores Husain.
Food inflation in Germany reached 16.6% year-on-year this August, way over the 7.9% general rate of inflation. Costs of food in the EU increased to 12.8% in July, compared to last year. Similarly, in the US food inflation is higher than the general inflation number (10.9% compared to 8.5% in July).
Diversified food sources
With the Russian invasion of Ukraine and the crumbling of the breadbasket of Europe, the weaknesses in our interconnected food system emerged.
“Before the war in Ukraine, the country produced enough food to feed 400 million people per year. Food export disruptions had immediate implications for countries that rely heavily on grain imports from both Russia and Ukraine – key players in global wheat and maize markets,” according to the WFP.
Forty-five African and food insecure countries imported at least a third of their wheat from Ukraine or Russia – 18 over 50% – with four countries sourcing over 80% of their wheat from the two nations (Eritrea, Somalia, the DRC and Laos).
Husain explains that because five or six countries control the production of the most important food commodities (such as wheat), the ramifications affect every country whenever there is a shock in one of the producers.
This means the shockwaves of food price spikes can be felt thousands of miles away, he underscores.
WFP out of money
1.5 million metric tons of food have left Ukraine toward global seaports in the first month of the Black Sea Corridor.
The WFP does not have the money to aid the 345 million people facing a hunger crisis, with the organization suspending efforts in some regions as their funds dry up.
Such is the case in South Sudan, where, while the WFP admits the country faces the worst year in terms of hunger since its independence in 2011, the organization decided in June to only target two-thirds of the starving nation as it ran out of funds.
“WFP is working to assist 152 million people and requires US$22.2 billion in 2022 to do this,” James Belgrave, communication officer at the WFP, tells FoodIngredientsFirst.
WFP negative records
UN estimates put the number of people in a hunger crisis at 345 million in 82 countries, up from 135 million in 2019, before the COVID-19 pandemic.
“When WFP is setting records, it’s not a good thing for the world. And, since 2020, WFP has been setting records,” says Husain.
“What scares me is that this is not about one, two, or five or ten countries. This is in 45 countries,” he continues.
50 million in 45 countries are teetering on the edge of famine, according to the WFP.
WFP helps Ukraine
In July, WFP reached more than 900,000 people in hard-to-reach or frontline areas directly affected by the fighting, according to the organization.
The WFP is also starting a value voucher program where 64,000 beneficiaries from its food assistance program will move to paper vouchers to spend in grocery shops (each voucher is valued at US$13) and try to reactivate the local economies.
Meanwhile, in the first month after the grain deal that allows grain to leave Ukraine’s Black Sea ports, 1.5 million metric tons of food have left the country borders toward global seaports, according to the Ukrainian infrastructure ministry.
By Marc Cervera and Gaynor Selby
