Global food prices are soaring at the fastest pace ever following the Russian invasion of Ukraine. Thus, the Food and Agriculture Organization of the United Nations (FAO) food price index jumped by 13% in March and reached a new high. The index, which tracks the most traded food goods in the world, stood at 159.3 points last month compared to 141.4 points in February.
The war is hurting crop supply, increasing inflation and exacerbating the global hunger crisis. Russia and Ukraine are major exporters of wheat, corn, barley and sunflower oil through the Black Sea, and the Moscow invasion on February 24 halted Ukrainian exports. The ports in Ukraine are closed and many vessels avoid the region, which accounts for about a quarter of all grain trade. Farmers in Ukraine are expected to drastically cut back on crop plantings and the nation is struggling to export the supplies that have already been harvested. At the same time, elsewhere in the world, high energy and fertilizer prices are raising food production costs.
The shortage of cereals is expected to continue in the coming months. Ukrainian plots sowed wheat shortly before the war, and the FAO predicts that 20% of the crop will not be harvested. Due to this estimate, the organization cut global wheat production forecasts in 2022 to 784 million tonnes, compared to a forecast of 790 million tonnes from last month. However, the FAO noted that the updated forecast is also 1% higher than the volume of wheat production in 2021.