September 27, 2022

Governments Tighten Grip on Global Food Stocks, Sending Prices Higher

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In a speech last week, Treasury Secretary Janet L. Yellen said the epidemic and the war had revealed that US supply chains, despite being efficient, were neither secure nor flexible. Cautioning against a “completely protectionist direction”, he said the United States should work to shift its trade relations to a larger group of “reliable partners”, even if it means businesses and consumers. It costs a little more.

Ngozi Okonjo-Iweala, director general of the World Trade Organization, said in a speech on Wednesday that the war had “appropriately” raised questions about economic dependence. But he urged countries not to draw the wrong conclusions about the world trade system, saying it had helped propel global development and provided important supplies to countries during epidemics.

“While it is true that the global supply chain may be disrupted, trade is also a source of flexibility,” he said.

The WTO has argued against export bans since the early days of the epidemic, when countries, including the United States, began imposing restrictions on the export of masks and medical supplies and gradually lifted them.

Now, the Russian invasion of Ukraine has triggered a similar wave of food-focused sanctions. “It’s like Deja Vu again,” said Mr. Avenet.

Safety measures have spread from country to country in a way that is particularly evident in the case of wheat. Russia and Ukraine export more than a quarter of the world’s wheat Feeding billions of people In the form of bread, pasta and packaged foods.

Mr Avenue said the current wave of trade barriers to wheat began when Russia and Belarus, the main characters in the war, blocked exports. Countries on a major trade route for Ukrainian wheat, including Moldova, Serbia and Hungary, have again begun to limit their wheat exports. Finally, major importers with food security concerns, such as Lebanon, Algeria and Egypt, imposed their sanctions.



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