World Bank Governor David Malpass said Russia’s invasion of Ukraine was a “catastrophe” for the world and warned of the negative impact of the war on global food supply, prices and even the crisis in the supply chain.
He emphasized that his primary concern was “pure loss of life,” and Malpas pointed out that the Ukrainian war would come in a “bad time” as the world is tackling rising inflation. He said the economic downturn has spread across Ukraine’s borders, with rising energy prices and inflation hitting the poorest in particular. BBC..
The aggression has pushed up food prices. This is a “very realistic consideration” for people living in poor countries, Malpas said, adding that both Ukraine and Russia are some of the largest producers of food.
Together, both countries account for 19% of the world’s corn supply, 29% of the world’s wheat exports, and 80% of the world’s sunflower oil exports. About 70% of Russia’s wheat exports last year went to the Middle East and African countries.
Currently, 14 countries depend on Ukraine for more than 10% of their wheat consumption, and Lebanon imports about half of its wheat from Ukraine. Libya imports 43% and Malaysia and Indonesia each import 28%.
Ukrainian supply was cut off as the port was closed due to the conflict. Russia’s supply is currently limited due to western sanctions that make it difficult for countries to buy from Moscow. “There is no quick enough way to adapt to the loss of supply from Ukraine and Russia, which will increase prices,” Malpas said.
World Bank Governor said he was also concerned about Russia’s energy supply turmoil. Malpas said the situation was particularly problematic for Western Europe, as the government in the region criticized it for ignoring “other aspects” of electricity generation.
About 39% of the European Union’s electricity comes from fossil fuel-burning power plants. Russia accounts for about 40% of EU natural gas imports and about a quarter of oil imports. Rising energy prices push up food prices and increase supply chain disruption.
Inventory reductions have complicated the problem. For example, according to the International Grain Council, wheat inventories in major exporters such as Russia, Ukraine, Canada, EU, Australia, the United States, Kazakhstan and Argentina are expected to fall to nine-year lows in the 2021/22 season. Has been (ICG).
Inventories in these eight countries account for 20% of the world’s inventories. With the exception of Russia and Ukraine, the remaining exporters make up only 16% of the world’s wheat inventories, which is just enough to feed the world in less than 21 days. Wheat futures have risen about 40 percent in 2022.
There are concerns that the war will prevent many Ukrainian and Russian farmers from planting crops next spring season, which could adversely affect food availability.
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Naveen Athrappully is a news reporter covering business and global events in The Epoch Times.