James Fell and Andrew Duver
There are several factors contributing to current high global food grain prices:
- The Russian invasion of Ukraine,
- Poor growing conditions in major exporter countries; and
- Impacts of the COVID-19 pandemic.
This has raised food security challenges globally. Food prices have increased 65% in the last two years and reached the highest level since October 2012.
The Food and Agriculture Organization of the United Nations (FAO), estimate between 720 to 811 million people faced hunger in 2020. High food prices will make conditions especially challenging for these people.
In response to rising grain prices, some governments have introduced export restrictions in an attempt to ease domestic food prices. The 2007-08 global food crisis demonstrated that widespread export restrictions are detrimental to global food security and provide questionable benefits to domestic food price stability.
While governments are unable to influence the global growing conditions, they can take steps to improve global food security. Measures include proactively eliminating export restrictions and other distortions to global markets, short-term humanitarian aid and market transparency.
- Export restrictions reduce the supply of food available on world markets which leads to higher prices.
- There has been an increase in the number of countries introducing export restrictions which could cause world prices to spiral higher.
- Removing export restrictions increases the availability of food to the world and increases the stability of food supplies.
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