(Bloomberg Opinion) — Governments around the world are taking steps to safeguard domestic food supplies after Russia’s invasion of Ukraine disrupted trade and pushed prices of staple foods to record highs. record.
Argentina and Turkey this week increased their control over local produce, while Bulgaria is seeking to grow its grain reserves. Moldova, although a small carrier, has temporarily banned exports of wheat, corn and sugar from this month.
Protectionist measures, which have resurfaced in recent years as Covid-19 raised concerns about local supplies and high prices, could mean more bad news for global food trade. The war in Ukraine has caused stop crop shipments from much of the crucial Black Sea region, raising fears of shortage of cereals and sunflower oil.
That adds to the global rise in food prices, raising the possibility of export restrictions, said Abdolreza Abbassian, an independent analyst. Harvest setbacks have exacerbated supply shortages, with world grain stocks expected to decline for a fifth year.
“It’s something you have to be concerned about, because we know it’s happened in the past,” said Abbassian, who has tracked agricultural markets for decades. “This is already a perfect storm. We don’t need another.”
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Prices of key staples rocket in wake of invasion of Ukraine
Argentina, a major grain exporter, is creating a mechanism to guarantee wheat supplies to local millers and control pasta prices. The main flour exporter, Turkey, boosted the agriculture ministry’s authority over exports of a range of products, allowing it to make “periodic fixes” if necessary.
In other measures, Indonesia, the top palm producer, moved in January to curb shipments to boost domestic supply. Russia has also been taxing grain shipments since last year and regularly issues sales quotas. The country’s trade has been further stifled by sanctions and the dangers that transit the Black Sea. On Friday, she urged fertilizer producers to stop exports.
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Governments Step In to Protect Food Supplies as Prices Spike
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