Export controls could trigger a new global food crisis, warns World Bank chief

TBS report

09 April 2022, 09:10 PM

Last modification: 09 April 2022, 21:23

World Bank Group President David Malpass. Photo: Reuters


World Bank Group President David Malpass. Photo: Reuters

An alarming global increase in government controls on food exports, triggered by the war in Ukraine, is making a global food crisis more likely, World Bank Group President David Malpass has warned, urging global policymakers to halt the trend.

“It is time to defuse the danger. A global food crisis is by no means inevitable,” he said, as global stocks of rice, wheat and maize remained high by historical standards.

A total of 35 countries have so far imposed food export restrictions, marking a 25% increase in the number of such governments in weeks since the outbreak of war in Ukraine, he pointed out. in a post on the band’s blog on April 8. .

By the end of March, 53 new policy interventions affecting food trade had been imposed – of which 31 restricted exports and nine involved restrictions on wheat exports, according to the latest data.

“History shows that such restrictions are counterproductive in the most tragic way,” he wrote, citing how such measures drove wheat prices up 30% a decade ago, worsening the global food crisis.

At a time of growing economic and geopolitical tensions, maintaining global food flows should be a minimum requirement for policymakers everywhere, he said.

The World Bank President explained why the food crisis is devastating for the poorest and most vulnerable people, mainly those in the world’s poorest countries, which tend to be food-importing countries.

Food accounts for at least half of total household spending in low-income countries, said the economist who had served as the US Treasury’s undersecretary for international affairs before taking over as WB group leader on April 9, 2019.

Russia topped the list of global wheat exporters, followed by the United States, Canada, France and Ukraine in 2020.

“If one of the top five wheat exporters were to ban exports, the cumulative effect of these measures would be to increase the world price by at least 13% – and much more if others react,” he said. he writes, sharing his concerns about the “multiplier effect” on global supply and international and domestic prices.

However, for now, the restrictive measures are not as extensive as those put in place a decade ago – encompassing 21% of world wheat trade today, compared to 74% in 2008. -2011.

“But the conditions are ripe for a round of retaliation in which the scale of restrictions could increase rapidly,” he warned, citing how Russian restrictions on wheat exports to countries outside the Eurasian Economic Union have caused concern for countries like Egypt that depend on wheat from Russia and Ukraine.

He referred to the commitment of the G7, which includes major food exporters such as the United States, Canada and the EU, not to impose food export bans and urged other exporters like Australia, Argentina and Brazil to join.

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