Record Food Prices Could Leap 20% More… Shockwaves Spread as Europe’s Economy Reels at Energy Fallout…

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A report from the agency’s Food and Agriculture Organization on Friday shows the far-reaching fallout of the war on the world’s food system, with the impact set to stretch well beyond the next season. Ukraine and Russia together account for more than a tenth of all calories traded globally, and those flows have been stifled since the conflict erupted late last month.

Soaring production costs means other countries will only partly be able to compensate for the “sudden and steep reduction” in Black Sea grain and sunflower exports in the coming 2022-23 season, FAO said. That will likely push international food and feed prices 22% higher and a “considerable” supply gap will linger going forward if the war persists and energy stays expensive.

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“The likely disruptions to agricultural activities of these two major exporters of staple commodities could seriously escalate food insecurity globally,” Qu Dongyu, FAO director general, said in a separate statement, adding hunger could also rise in Ukraine. “International food and input prices are already high and volatile.”

Two weeks since Russia began Europe’s biggest conflict since World War II, businesses across the continent are already in varying stages of despair at the consequences on livelihoods.

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A crisis of human suffering in Ukraine, whose wider economic impact prompted European Central Bank officials to quicken their withdrawal from stimulus this week, is affecting prosperity from the farmlands of Spain to the euro zone’s manufacturing core in Germany and France.

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Surging energy costs are the central complaint, though disrupted supply chains, sanctions and worries about a looming demand drop are also weighing on enterprises. The abrupt shock of war nearby, combined with broad effects and an uncertain duration, will pile pressure on governments to cushion the blow as well as testing their resolve to confront Russia.

“I don’t know what to do if the war in Ukraine continues for much longer,” Spanish pig farmer Lorenzo Rivera said in an interview this week. “I either have to halt production — or close business for good.”


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