Global Food Prices Hit Record Highs Amid Russia-Ukraine War

by Samantha Whidden
MARIUPOL, UKRAINE - APRIL 08: A view of damaged sites during ongoing conflicts in the city of Mariupol under the control of the Russian military and pro-Russian separatists, on April 08, 2022. (Photo by Leon Klein/Anadolu Agency via Getty Images)

As the conflict between Russia and Ukraine nears the two-month mark, global food prices reportedly hit record highs.

What You Need To Know

  • The Food and Agriculture Organization of the UN reports that its food price index averaged 159.3 points in March 2022
  • This is a 12.6% increase from February 2022. When global food prices hit its highest level since its inception in 1990
  • The latest level of the index was 33.6% higher than in March 2021

The Food and Agriculture Organization of the UN reported its Food Price index average was 159.3 points in March. This is up 12.6% from February 2022, when it already reached its highest level since its inception in 1990. The index tracks monthly changes in the International prices of a basket of commonly-traded food commodities. The latest level of the index was 33.6% higher than in March 2021. 

It was noted that the Ukraine and Russia conflict is spreading shocks through markets for staple grains and vegetable oils. “The expected loss of exports from the Black Sea region exacerbated the already tight global availability of wheat. With concerns over crop conditions in the United States of America also adding support, world wheat prices rose sharply in March, soaring by 19.7 percent.”

While focusing on exports, the organization stated that the expected loss of exports will manifest into lower shipments to and from the region. This will cause higher global prices, reduced imports, as well as slower demand growth. 

In regards to port closures in Ukraine, the organization reported the closures are seen significantly limiting exports from the country. Meanwhile, financial and freight challenges are hindering exports from Russia. “These factors are likely to remain in effect for the remainder of the 2021/22 season,” the organization concluded.

Grain Focused Countries Continue to Push Production Amid Russia-Ukraine War

The Food and Agriculture Organization has also reported that feed prices could rise as much as 20%. This may cause malnutrition in countries throughout the Middle East, Africa, Asia, and elsewhere. The organization is cutting its projection of world wheat production in 2022 to 784 million tons from 790 million in March. This is due to the 20% of Ukraine’s winter crop is not harvested. 

“There is a sharp deterioration of the food and nutrition security in the region,” Sib Ollo, who is a senior researcher for the West and Central African regions of the WFO, explained. Ollo noted that six million children are now malnourished and nearly 16 million people in urban areas are at risk of food insecurity.

Ollo then added, “The cost of fertilizers has increased by almost 30% in many places of this region. Due to the supply disruption that we see provoked by a crisis in Ukraine.”

Other large grain-producing countries, such as the U.S., Canada, France, Australia, and Argentina, are trying to ramp up production.