Protectionism Could Worsen Global Food Crisis
- May 25, 2022
- Posted by: Quatro Strategies
- Category: Agribusiness
A worsening global food crisis pushes the countries to follow protectionist policies, which are likely to multiply the problem and could lead to an even worse crisis and a wider trade war, political and business leaders said at the World Economic Forum (WEF).
As a precaution against escalating shortage of food supplies and rising prices, India may decide to restrict sugar exports for the first time in six years to prevent a surge in domestic prices.
Meanwhile Indonesia, the world’s biggest palm oil exporter, will remove a subsidy on bulk cooking oil and replace it with a price cap on the raw materials for local refiners.
The world leaders think the food crisis could grow even bigger going ahead. Protectionism is a big issue in Davos, prompting calls for negotiations to avoid a global trade war.
Davos attendees state that the world leaders should sit at the table and discuss how they will manage trade, food and investment. G7 countries have started unofficial conversations on the matter.
As a result of soaring food prices and a huge hit to the cost of living, more than 20 countries so far have put restrictions on food and fertilizer exports, which could make the problems worse.
The food crisis has deepened with Russia’s invasion of Ukraine, but it was already there before the war as food and shipping costs, commodity prices were skyrocketing. The number of people at risk of starvation has risen from 80 million to 276 million over the last four to five years.
Ukraine’s Black Sea ports are kept closed by the Russian blockade as the country’s July-August harvest season is near. It means the crisis could get much worse.
Many companies at Davos have been discussing how they can act to address the food crisis. Different farming practices and preventing food waste are among the solutions offered.
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