A new assessment by the United Nations Conference on Trade and Development (UNCTAD) on the impact of the war in Ukraine on trade and development confirms a rapid worsening of the outlook for the global economy, supported by rising food, fuel and fertilizer prices.
The report highlights increased financial volatility, disinvestment in sustainable development, complex global supply chain reconfigurations and rising trade costs.
“The war in Ukraine is taking a huge toll in human suffering and is shaking the global economy,” UNCTAD Secretary-General Rebekah Grynspan said in a statement.
According to the United Nations, Russia and Ukraine are global players in the agri-food marketsThe two countries account for 53 percent of the share of global trade in sunflower oil and seeds, and 27 percent of the share of global wheat trade.
* Harmonized System codes are 1001 (wheat), 1003 (barley), 1005 (maize), 120510 (rapeseeds), and 120600 and 151211 (sunflower seeds and oil).
The situation is particularly worrying for food importers. According to UNCTAD, 25 African countries import more than a third of their wheat from the two warring countries. For most of them, the share is more than half.
“Soaring food and fuel prices will hit the most vulnerable in developing countries and put pressure on the poorest households, who spend most of their income on food, leading to hardship and hunger,” Grynspan said.
According to UNCTAD calculations, on average, more than 5% of the import basket of the poorest countries is made up of products that are likely to face a price increase due to the war. The proportion is below 1% for the richest countries.
The risk of civil unrest, food shortages and inflation-induced recessions cannot be ruled out, the report says, particularly given the fragile state of the global and developing world economies due to the COVID-19 pandemic.
“The long-term effects of rising food prices are difficult to predict,” the report says, “but an UNCTAD analysis of historical data sheds light on some possible consequences.” worrying trends".
Agri-food commodity cycles, for example, have coincided with major political events, such as the food riots of 2007-2008 and the Arab Spring of 2011.- (UNCTAD Evaluation)
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