The prominent international financial institution known as the International Monetary Fund (IMF) has recently advised multiple countries to reconsider their existing food export policies. The aim is to contend with increasing concerns related to the issue of global food security.
In contrast, the National Economic Social Development Council (NESDC) of Thailand has expressed its confidence in its preparedness to manage food security concerns, affirming the existence of a robust crisis response plan. The Thailand Development Research Institute (TDRI) has conducted a study, which suggests that by 2024, escalating food prices could be a result of the El Niño weather phenomenon triggering a worldwide decrease in agricultural production.
Recently, rising food prices induced by conflicts have globally intensified the food security situation, impacting food production significantly. As per a report released by the World Bank on July 31, high levels of food inflation are a challenge being faced globally. Between February and May, inflation rates over 5% have been an issue for 63.2% of low-income countries, 79.5% of lower-middle-income countries, and 67% of upper-middle-income countries. Countries grappling with this challenge are facing double-digit inflation rates.
A noteworthy detail is the 78.9% of wealthy nations dealing with high food inflation. The regions most affected include Africa, North America, Latin America, South Asia, Europe, and Central Asia.
In fact, higher food inflation rates are a growing concern for all economies. As of July, 80.1% of 166 countries surveyed by the World Bank were dealing with increased prices in agricultural export and crop items. In the initial half of July, corn and wheat prices underwent a rise of about 12% and 14%, respectively, leading to increased food inflation. However, the price of rice had maintained stability. Looking back annually, both corn and wheat saw a decrease in their prices by 15% and 17% respectively, from January 2021. Comparing the prices from July 2021, while corn had a rise of 8% and wheat of 11%, the increase in the price of rice was a mere 3%.
On July 17, 2023, Russia declared the termination of the agreement regarding the exporting of crops from Ukraine and Russia via the Black Sea, facilitated by the United Nations and Turkey. The reason cited was the failure to meet the conditions for Russia’s crop production. This resolution aimed to guarantee global food security, and since its first enforcement in July 2021, it has been extended several times.
A couple of days later, on July 19, 2023, India revised its policy to enforce an immediate ban on non-basmati rice exports. The aim was to ensure domestic rice supply, even though this step was sure to impact global rice prices. With nearly a 40% share in the global market, India amounts to a major rice exporter. In 2022, its export of rice accounted for an astonishing 55.4 million tonnes, a figure significantly larger than the combined exports of the following four countries: Thailand, Vietnam, Pakistan, and the United States.
But this move by India to reduce rice exports might heighten the volatility of global food prices. Thus, the IMF has advised the Indian Prime Minister Narendra Modi to reconsider this policy meticulously, especially considering the critical elections due in the same year. India is currently dealing with inflated tomato prices, leading to incidents of thefts; in fact, consumers have resorted to buying tomatoes from Nepal due to local shortages.
It is evident that a grave food crisis is a looming threat worldwide, with many contributing factors leading to food insecurity and mounting food prices. Countries such as India, being a key player in the rice market, have had to take steps to secure domestic food supplies, with potentially significant impacts on global food prices and availability. Therefore, the need for a comprehensive crisis response plan and international cooperation to tackle such a challenge can’t be overstressed, as authorities worldwide are emphasizing.
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