2 years ago
Panic buying is back. But instead of individual consumers cleaning out store shelves of toilet paper, as they did in the early days of the Covid-19 pandemic, the culprits now are national governments, who are hoarding food supplies in the wake of Russia’s invasion of Ukraine.
And U.S. officials are warning that such behavior could prove catastrophic for the global food supply, which is still recovering from the pandemic’s effects.
Russia and Ukraine together provide about 30 percent of the world’s wheat. But since Russian forces launched an invasion of their neighbor in late February, ports and supply routes have been shuttered and sanctions have blocked Russian exports to many of the world’s major economies.
That’s prompted governments across Europe, Africa and the Middle East to scramble for a new source of nutrition for millions of people. To make matters worse, many of the countries who could help fill those voids — including Hungary, Argentina and Turkey — have placed restrictions on exports of key food products, arguing they need to keep enough supply for their own populations. China has also signaled it will likely hold back on rice exports, another major source of global nutrition, as food insecurity grows.
Beijing already holds half of the world’s wheat supply in storage and its panic buying is further driving up prices.
“It’s like pandemic hoarding, but it’s not toilet paper, it’s millions of bushels of grain that normally feed large portions of the world,” said a Biden administration official. “Countries are instead sitting on those supplies because they aren’t sure when this will end.”
After the wheat market reached an all-time high earlier this week, U.S. Agriculture Secretary Tom Vilsack and agricultural ministers from six other major economies warned on Friday that countries refusing to export food products would only drive further price spikes, saying it “could threaten food security and nutrition at a global scale, especially among the most vulnerable.”
The G-7 officials, who met virtually to discuss Ukraine, called on countries to keep their food and agricultural markets open and “to guard against any unjustified restrictive measures on their exports.”
Vilsack said later that Ukrainian Agrarian Policy and Food Minister Roman Leshchenko spoke to the group from a bunker and asked the countries to provide fuel to help Ukrainian farmers harvest and plant new crops this spring, as the nation faces a rapidly escalating humanitarian crisis.
Leshchenko’s request for help came just as the United Nations released a report Friday that estimated international food and feed prices could rise by as much as 20 percent as a result of the conflict. U.S. lawmakers and officials tracking the situation are especially worried about shortages and price spikes unleashing social unrest in countries across Africa and the Middle East.
The U.S., a major grain exporter, will likely be insulated from the worst of the price spikes, said Scott Irwin, an agricultural economist at the University of Illinois.
“The concern is mainly consumers in poorer countries getting priced out of the market and the human cost of that,” Irwin said.
U.S. officials have been tracking China’s moves in the wake of the conflict and are wary that Beijing is positioning itself to use its mass reserves as a political cudgel against countries in Africa and the Middle East who will be in increasingly desperate need for food supplies as the conflict continues.“The biggest question is whether Beijing is doing this just because it’s worried about securing enough food for its own population, or if it has plans beyond that,” the Biden official said.
English (US)