Food Security

Russia’s July 17 withdrawal from the Black Sea Grain Initiative (BSGI), has sparked fears of reduced exports of wheat and other key commodities to developing countries, along with other market disruptions.

On July 20, India announced that it would restrict exports of non-basmati rice to calm domestic rice prices that had risen more than 30% since October 2022 (Figure 1). The ban would halt overseas sales of the grain with “immediate effect,” the government announced, and is estimated to cover about 75%-80% of Indian rice exports.

With the world already reeling from the high food prices and other economic impacts of the COVID-19 pandemic, the outbreak of conflict in Ukraine in February 2022 again raised the specter of a major global food security crisis. Since that time, analysis of the extant and potential future impacts of the conflict on food and fuel prices, trade, food security, and poverty has been a primary focus for policymakers, researchers, and development professionals around the world.

When the global prices of staple commodities surge, some governments react immediately by imposing trade-restricting measures in order to insulate domestic prices from rising world prices. During the global food price crisis of 2007–2008, such behavior was observed among many governments, particularly in net food-exporting countries, in response to the impending food security shock. As many as 16 countries imposed some form of export restriction, such as a ban or export tax, on commodities including rice, wheat, maize, other grains, and vegetable oils.

The FAO Food Price Index declined by 2.6 percent in May. Compared to May 2022 levels, the Index is 22.1 percent below its all-time high.