Davos – Business leaders and policymakers at the World Economic Forum say a growing global food crisis is prompting countries to take protective measures that could complicate matters and lead to a larger trade war.
As a sign of mounting pressure on food supplies and rising prices, an official source told Reuters that India could restrict sugar exports for the first time in six years to stem the rise in domestic prices.
Meanwhile, Indonesia, the world’s largest exporter of palm oil, will withdraw subsidies on bulk cooking oil and replace local refineries with raw material price caps.
“This is a major problem, and to be honest I think the problem is bigger in front of us than behind us,” Gita Gopinath, the first deputy managing director of the International Monetary Fund, told Reuters about growing food security concerns.
Security is gaining momentum in Davos, urging urgent talks to avoid a full-blown trade war.
“It’s important for world leaders to sit quietly at the table and talk about how we manage trade and food and investment,” Jay Collins, vice chairman of banking, capital markets and advisory at Citigroup, told Reuters Global Markets. Forum in Davos.
“There’s actually been a lot of conversation with the G7 here in the last 48 hours,” Collins said.
For residents of sub-Saharan African countries, for example, 40% of their expenditure is spent on food, Gopinath said. As well as a “huge blow to the cost of living”, the rise in prices has given rise to hoarding by the government.
“We have more than 20 countries that have imposed restrictions on food and fertilizer exports and this could only complicate the problem and make the situation worse,” he said on Monday.
Russia’s invasion of Ukraine, which Moscow has described as a “special military operation”, has led to a crisis that is already closed.
“Before Ukraine, we were facing an extraordinary food crisis, food costs, commodity prices, shipping costs have already doubled, tripled, quadrupled,” said David Bisle, executive director of the UN World Food Program.
In an interview with Reuters in Davos, Basley said the number of people “starving” has risen from 80 million to 276 million in the last four to five years.
“Closing ports in Ukraine as the harvest season approaches in July and August means a declaration of war on global food supplies,” he said.
Many companies in Davos have been contacted about how they can work to tackle the food crisis, Bisle added.
“Agriculture must be part of the solution to climate change and tackle food security,” said Eric Firewald, CEO of Syngenta Group, during a panel discussion on Monday.
Firewald said Syngenta has an exhibition farm that shows how farming practices such as not cultivating soil and covering crops in winter to prevent soil erosion are good for soil, food security and climate change.
Another possible solution to the food crisis is tackling waste, Gilberto Tomazoni, CEO of JBS SA, the world’s largest meat processor, told a WEF panel on Tuesday.
“Humanity is facing two major emergencies at the same time, we need to face climate change and we need to produce more to feed our growing population,” Tomazoni said.
“And the way we produce today is not sustainable. This is our big, big challenge. Food waste, we have to take this situation, “Tomazoni added. (Reporting by Jessica Dinapoli, Dan Burns and Divya Chowdhury; Edited by Alexander Smith)