Business Today

There may be a food shortage in the world at the beginning of next year

Food prices in the world market have been falling for five months. The Food and Agriculture Organization of the United Nations (FAO) index stood at 138 points in August, down 1.9 percent from July. Despite this, food prices increased by 7.9 percent in August this year compared to August last year. Although food prices have increased this year, there is no shortage of food. But there is a fear of food shortage in the world market in March-April of next year.

This year, food production is disrupted not only because of the Russia-Ukraine war, but also because of the climate. This year has been very hot all over the world. According to data from the European Drought Observatory (ED), 47 percent of Europe’s soil has dried up due to moisture loss. Crop production is disrupted. There is fear of food shortage in the beginning of next year. Also, if the Russia-Ukraine war is prolonged, the situation may worsen.

FAO Senior Economist Upali Wickramasinghe said these things in the session organized under the Bay of Bengal Regional Trade and Connectivity Capacity Building Program or the Bay of Bengal Regional Trade and Communication Capacity Building Program of Sanem Research Institute. Discussed by Sri Lankan economist Nihal Pitigala.

Speakers in the event said that although the price of food in the world market is decreasing, the price is not decreasing at the regional and national level. They mainly blame uncertainty as the reason for this. Along with this, the increase in processing and transportation costs, the increase in the exchange rate of the dollar – these reasons are also not affecting the price reduction at the local and international levels. Also, there is an impact on the policy stance of the exporting countries, such as raising tariffs on food exports whenever there is some uncertainty.

In response to the question of what countries like Bangladesh and Sri Lanka should do in this situation, Upali Wickramasinghe said that keeping the market open is the best solution. It has been observed that the export ban often worsens the situation. For that, the importers should reach an agreement through discussions with the exporters at this time. Apart from this, he opined that farmers are not interested in increasing production in many cases due to the increase in the price of agricultural inputs, which should be taken into consideration.

Apart from this, Upali Wickramasinghe said that the most distressed countries will be given financial assistance by FAO.

Noting that food becomes a weapon during times of crisis, the speakers said that various restrictions on food exports are imposed on the issue of food security, such as India imposing additional duty on the export of certain varieties of rice. In this reality, many countries are now trying to become self-sufficient in food production, although it is not an easy task.

Pushpa Sharma, a Nepali researcher who participated in the event, said that it is not possible for a country like Nepal, because if it is to be self-sufficient in food production, then fertilizers must be imported. As a result, he opined that this principle of self-sufficiency is not suitable for everyone.

In this situation, Upali Wickramasinghe thinks it is desirable to have mutual communication between food producers ie farmers. He said, Sri Lanka’s experience has shown that only state initiatives work in emergency savings.