World braces for new wave of food price surges due to Middle East, Ukraine wars, FAO warns

Rome: The UN's Food and Agriculture Organization (FAO) has issued a warning that the world is set to face another surge in food prices due to the consequences of conflicts in Ukraine and the Middle East, combined with the effects of climate change, according to Maximo Torero, the chief economist at the organization.

Torero stated that the escalating tensions in Iran and Ukraine, along with the El Nino weather phenomenon, are fostering an environment favorable to higher costs and diminished crop yields, leading to a forecast of rising commodity prices and subsequent food price hikes by year-end, with further escalations anticipated in the following year.

He described the situation as "disquieting," emphasizing that the convergence of conflicts, supply disruptions, and climate-related shocks poses a significant threat to global food security.

Torero elaborated that the repercussions of these commodities on final food prices will manifest within a timeframe of three to six months, underscoring the impact of the closure of the Strait of Hormuz on all agricultural commodity inputs and systems, given that Brent crude is utilized for pumping, packaging, processing, and transportation, while natural gas is employed in fertilizer production.

Moreover, the damage caused by Ukraine's actions against Russia's oil and gas infrastructure has impeded the export market for diesel and natural gas, which are crucial components in food production.

Furthermore, Torero anticipates that this year's El Nino weather phenomenon, expected to be particularly intense, will drastically alter rainfall patterns, potentially influencing commodity prices and thrusting tens of millions into acute food insecurity.

Despite the relatively stable food prices observed this year, Torero anticipates a temporary respite, citing worrisome trends such as soaring crude oil prices, a scarcity of fertilizer from the Gulf region, diesel shortages globally, and adverse weather conditions, all of which are propagating costs and expected to impact consumer prices, albeit with a delay.