The Food Issue Cannot Be Ignored

According to reports, due to various factors such as drought or too much rain, the war in Ukraine, and high energy costs, global agricultural production will be curbed again in 2023, tightening supplies. Food prices would continue to increase and worldwide food problems may be unavoidable. Ole Houe, director of consulting services at an agricultural brokerage company in Sydney, Australia, said that at present, the production prospects for cereals and oilseeds are not optimistic. Production of staples such as rice and wheat is unlikely to replenish depleted inventories, at least in the first half of 2023, while crops producing edible oils are suffering from adverse weather in Latin America and Southeast Asia. With food prices climbing to record peaks this year, millions of people are suffering across the world, especially poorer nations in Africa and Asia already facing hunger and malnutrition. Corn and soybeans climbed to their highest prices in a decade, while Malaysia’s benchmark crude palm oil prices climbed to a record high in March. Food import costs are already on course to hit a near $2 trillion record in 2022, forcing poor countries to cut consumption. Benchmark Chicago wheat futures jumped to an all-time high of $13.64 a bushel in March after Russia’s invasion of key grain exporter Ukraine, while the market had already been hit by adverse weather and post-pandemic restrictions.

Separately, recent dryness in parts of Brazil, the world’s top bean exporter, has raised worries. Still, higher prices of grains and cereals have encouraged farmers to plant more crops in some countries including India, China, and Brazil, but the output is expected to remain subdued due to adverse weather and other factors.