Russian President Vladimir Putin announced Western sanctions on Thursday on Moscow for his actions in Ukraine could send global soaring food prices, while Russia one of the world is main producers of fertilizer, which is essential for global supply chains.
“Russia and Belarus are of the biggest suppliers of mineral fertilizers. If they keep creating problems for financing and logistics of the delivery of our goods, then the prices will be rise and it will affect the final product, food products,” Putin said during a government Meet.
Meanwhile, soaring energy and food prices triggered by Russia invasion of Ukraine could exacerbate existing food security concerns in in the Middle East and Africa, and could fuel the growth social unrest, World Bank chief economist Carmen Reinhart also notified on Thursday.
Germany will host a virtual Meet of Group agriculture ministers of Seven (G-7) advanced economies on Friday to discuss the impact of the invasion amid growing concerns about stabilizing food markets.
“There will be significant ramifications for Middle East, for Africa, North Africa and Sub-Saharan Africa, in individual”, who had already is experiencing food insecurity, Reinhart told Reuters in a meeting.
“I do not want be melodramatic, but it’s not far stretch that food insecurity and riots were part of of the story behind the Arab Spring,” she said, adding that both successful and failed coups had increased over the past two years.
The Arab Spring refers to a series of pro-democracy protests and uprisings that took place in the beginning of the Middle East and North Africa in 2010, beginning in Tunisia and extending to five other countries: Libya, Egypt, Yemen, Syria and Bahrain.
sudden spikes in food prices can lead for social trouble, as happened in 2007-2008 and again in 2011, when global food price increases have been associated with riots in more over 40 countries.
Agricultural products were already 35% higher in January, compared to with a year there is, and should rise due to the war since both Russia and Ukraine are major exporters of wheat, maize, barley and sunflower oil, the World Bank reported last months, days after Russian invasion has begun.
Moscow calls its actions in Ukraine a “special transaction.”
Soaring energy and food prices could also push policy makers to implement more subsidies, experts say, adding to heavy debts of many low income people countries, of of which about 60 are either already in or near debt distress.
the bank last months warned that the impacts could be particularly harsh in the Middle East and North Africa, where countries like Import from Egypt up at 80% of their wheat from Ukraine and Russia. Mozambique is also a grand importer of wheat and oil.
Reinhart said Central Asia countries also faced significant economic challenges given their economic proximity and trade ties with Russia, which the Monetary Fund international expects to tip into a recession this year like a result of Western sanctions.
“His hit their currencies, and there are signs already of runs on banks, trust issues, couple with food insecurity and (drop in) remittances,” she said, alluding to potential refugee flows as an added complication.
