The world commemorates World Hunger Day on 28 May to call attention to the food crises that are occurring in both international and localised settings.
An important factor that impacts on hunger is the affordability of food. In March 2020, the United Nations Food and Agriculture Organization (UN FAO) reported that the world’s Food Price Index (FPI) reached an all-time high in March 2020, trumping even the food prices during the Global Food Price Crisis of 2007-08.
Conflict-Related Food Security Challenges
Russia’s invasion of Ukraine has contributed to the rise in world food prices. While Southeast Asia is the “Rice Bowl” of the world owing to rice exports of Vietnam and Thailand, Russia and Ukraine are the “Bread Baskets” due to their wheat exports. Russia and Ukraine contribute close to 24% of global wheat exports in total quantity, trumping even the United States and Canada combined (23%), International Trade Centre data shows.
In end-March, an information note by the UN FAO indicated that “the immediate food security dimension (of the ongoing war) is related to food access and not food availability.” It argued that staple crops are currently available within Ukraine, but a key challenge is that almost half of the available wheat is stored in areas where active fighting is taking place. It is uncertain, though, whether any of these grain stocks will survive the war, or whether these might have instead been stolen or worse, destroyed.
Potential Policy Implications
The UN FAO’s Director-General has emphasised that “the most significant threats stem from conflict, and the associated humanitarian impact, together with multiple overlapping crises.” Amid the war, there is a temptation for governments to panic and take extraordinary interventions like banning exports to keep domestic prices low, as noted by the World Bank’s head for Sustainable Development. In end-April, for instance, Indonesia already banned its exports of edible palm oil, another commodity impacted by the war.
The argument to trust in the international trade system (and avoid interventions), as far as the wheat sector is concerned, holds water, especially given the UN FAO’s anticipation of rebalancing in global food supply chains. India and countries in the European Union are expected to step up production levels to increase exports, thus filling war-related gaps. In mid-April, the heads of the World Trade Organisation (WTO), the World Bank, the International Monetary Fund (IMF), and the World Food Program (WFP) issued a joint statement urging coordinated action to help vulnerable countries address growing threats to food security.
Within Southeast Asia, no note-worthy actions have been taken to address wheat-related challenges. This is potentially because the most widely consumed commodity across ASEAN is rice, making up half of the region’s total caloric intake. This should not lull the region towards complacency, though, as it is in fact a net importer of wheat and maize. While ASEAN has no parallel mechanisms in the case of wheat and maize that match the ASEAN Plus Three Emergency Rice Reserve (APTERR) mechanism to stabilise rice prices, it is nonetheless worth pondering whether similar regional reserve mechanisms can be explored in the long-term for other essential commodities beyond rice.