Miller Magazine Issue: 150 June 2022

26 MILLER / JUNE 2022 NEWS The Russia-Ukraine conflict is driving food prices higher. Commodities that have been most affected are wheat, maize, edible oils, and fertilizers. Global commodity markets face upside risks through the reduction in grain supplies, higher energy prices, higher fertilizer prices, and trade disruption due to shutting down of major ports. Many countries are facing growing levels of food insecurity, reversing years of development gains, and threatening the achievement of Sustainable Develop- ment Goals by 2030. Even before COVID-19 reduced incomes and disrupted supply chains, chronic and acute hunger were on the rise due to various factors, including conflict, socio-economic conditions, natural hazards, climate change and pests. The impact of the war in Ukraine adds risk to global food security, with food prices likely to remain high for the foreseeable fu- ture and expected to push millions of additional people into acute food insecurity. While the outlook for global food supplies remains fa- vorable, food prices increased sharply due to elevated input prices which, combined with high transport costs and trade disruptions due to the war in Ukraine, are raising import bills. That hits poor and developing coun- tries hardest, as they depend on food imports the most. As of May 19, 2022, the Agricultural Price Index is up 42% compared to January 2021. Maize and wheat prices are 55% and 91% higher, respectively, compared to January 2021, while rice prices are about 12% lower. Domestic price inflation remains high. Between Janu- ary 2022 and April 2022, 92.9% of low-income coun- tries, 84.2% of lower-middle-income countries, and 78% of upper-middle-income countries have witnessed in- flation levels above 5%, with many experiencing dou- ble-digit inflation. According to the World Bank’s April 2022 Commodity Markets Outlook, the war in Ukraine has altered global patterns of trade, production, and consumption in ways that will keep prices at historically high levels through the end of 2024 exacerbating food insecurity and in- flation. Numerous countries are experiencing high food price inflation at the retail level, reflecting labor shortages, a sharp rise in the price of fertilizer, currency devalua- tions, and other factors. Rising food prices have a great- The Russia-Ukraine war drives grain prices higher