Food Riots Ahead - Prepare Now - Food Security Update | Rising Food Insecurity in 2022

June 22, 2022 – Many countries are facing growing levels of food insecurity, reversing years of development gains, and threatening the achievement of Sustainable Development Goals by 2030. Even before Covey 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 future and expected to push millions of additional people into acute food insecurity. This brief looks at rising food insecurity and World Bank responses to date.

Overview
While the outlook for global food supplies remains favorable, 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 countries hardest, as they depend on food imports the most.

As of June 16, 2022, the Agricultural Price Index is 14% higher compared to January 2022. Maize and wheat prices are 27% and 37% higher, respectively, compared to January 2022, while rice prices are about 17% lower. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)

Domestic price inflation continues to rise around the world—with 94% of low-income, 89% of lower-middle-income, 83% of upper-middle-income, and 70% of high-income countries experiencing high food price inflation (greater than 5%) and many seeing double-digit inflation. In most countries, food price inflation exceeded overall 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 of commodities in ways that will keep prices at historically high levels through the end of 2024 exacerbating food insecurity and inflation.

Numerous countries are experiencing high food price inflation at the retail level, reflecting labor shortages, a sharp rise in the price of fertilizer, currency devaluations, and other factors. Rising food prices have a greater impact on people in low- and middle-income countries since they spend a larger share of their income on food than people in high-income countries.

Food prices were already high before, and the war is driving food prices even higher. Commodities that have been most affected are wheat, maize, edible oils, and fertilizers. Global commodity markets face upside risks through the following channels: reduction in grain supplies, higher energy prices, higher fertilizer prices, and trade disruption due to shutting down of major ports.

Over the coming months, a major challenge will be access to fertilizers which may impact food production across many crops in different regions. Fertilizer prices surged in March, up nearly 20% since January 2022 and almost three times higher compared to a year ago. Russia and Belarus are major fertilizer exporters, accounting for 38% of potassic fertilizers, 17% of compound fertilizers, and 15% of nitrogenous fertilizers.

On April 13, 2022, The heads of the World Bank Group, International Monetary Fund, United Nations World Food Programme, and World Trade Organization released a joint statement calling on the international community for urgent action to address food insecurity, to keep trade open and support vulnerable countries, including by providing financing to meet the most urgent needs.

Following the start of the war in Ukraine, trade-related policies imposed by countries have surged. As of June 16, 20 countries have implemented 33 food export policy measures affecting 7.07% of calories traded in global markets, and six countries have implemented eight export-limiting measures covering 2.88% of global traded calories.

Globally, hunger levels remain alarmingly high. In 2021, they surpassed all previous records as reported by the Global Report on Food Crises 2022, with close to 193 million people acutely food insecure—nearly 40 million more people than during the previous high reached in 2020. Conflict and insecurity are identified as the main drivers of increased food insecurity. In addition, WFP and FAO warned that acute food insecurity could worsen in 20 countries or areas during June to September 2022.

Rapid phone surveys done by the World Bank in 83 countries show a significant number of people running out of food or reducing their consumption in the first two years of the . Reduced calorie intake and compromised nutrition threaten gains in poverty reduction and health and could have lasting impacts on the cognitive development of young children.

World Bank Support
In the face of multiple crises, the World Bank is deploying short- and long-term responses to boost food and nutrition security, reduce risks, and strengthen food systems.