“Prices of nearly all food commodities are rising – no thanks to the Russian invasion of Ukraine, the COVID pandemic, an unpredictable weather, and shortages created by the tripling of prices of inputs like fertilizer“
In May this year, agriculture officials of Thailand and Vietnam met to form a rice cartel and increase the price of their rice exports. Thailand is the world’s second largest rice exporter. Vietnam is third.
Rice growers in both countries were trained in the Philippines how to plant rice. Now, Filipinos are buying from them. Talk about loving your neighbor.
Thailand and Vietnam account for 10 percent of global rice production and for a quarter of rice exports. The two rice behemoths probably don’t need to form a rice cartel.
Prices of nearly all food commodities are rising – no thanks to the Russian invasion of Ukraine, the COVID pandemic, an unpredictable weather, and shortages created by the tripling of prices of inputs like fertilizer.
Thailand and Vietnam are reportedly restricting their exports of rice.
A recent The Economist magazine issue (May 21-27, 2022) predicts “The Coming Food Catastrophe.”
According to The Economist, “Russia and Ukraine supply 28 percent of globally traded wheat, 29 percent of the barley, 15 percent of the maize and 75 percent of the sunflower oil. Russia and Ukraine contribute about half the cereals imported by Lebanon and Tunisia; for Libya and Egypt the figure is two-thirds.
“Ukraine’s food exports provide the calories to feed 400m people. The war is disrupting these supplies because Ukraine has mined its waters to deter an assault, and Russia is blockading the port of Odessa.”
Even before the invasion, notes The Economist, “the World Food Program had warned that 2022 would be a terrible year. China, the largest wheat producer, has said that, after rains delayed planting last year, this crop may be its worst-ever.
“Now, in addition to the extreme temperatures in India, the world’s second-largest producer, a lack of rain threatens to sap yields in other breadbaskets, from America’s wheat belt to the Beauce region in northern France. The Horn of Africa is being ravaged by its worst drought in four decades.”
Welcome to the era of food shortages.
It will be bad for the Filipino. On average, Filipino households spend 38 percent of their budget on food, the same ratio as sub-Saharan Africa.
The poorest Filipino families spend as much as 55 percent of their income on food, including 15 percent for rice alone.
With the global food shortage looming, expect hunger and poverty to worsen in the Philippines. The Global Hunger Index rates hunger in the Philippines as moderate. That is a lie.
In the first quarter of 2022, according to the Social Weather Stations, 12.2 percent of families suffered involuntary hunger– not being able to eat at least once in the past three months, up from 11.8 percent last year.
There are 25 million families. Twelve percent of that is 3.1 million Filipinos or one of every eight Filipinos.
The Ukraine war has worsened the food shortage. Here in the Philippines, UP economists think agriculture is not much of a problem. Not enough rice output? Well, draw from the country’s $106 billion dollar reserves to import rice. But what if you cannot buy any?
You cannot make the poor eat cake, as Marie Antoinette famously suggested in 1789 during the French Revolution. She was guillotined.
Here in the Philippines who will the people send to the gallows? The experts who advocate rice importation are all in the BBM Cabinet.
In the meantime, The Economist reports:
“The response by worried politicians could make a bad situation worse. Since the war started, 23 countries from Kazakhstan to Kuwait have declared severe restrictions on food exports that cover 10 percent of globally traded calories. More than one-fifth of all fertilizer exports are restricted. If trade stops, famine will ensue.”
Thai rice, 5 percent broken, was priced at only $418 per ton in 2019, before the pandemic. It rose 19 percent to $496.80 per ton in 2020, and further to $528.30 in January-March 2021, before settling at $464 in May 2022. Now, Thailand has restricted export of its rice.
Corn was priced at only $170 per ton in 2019. By May 2022, its price has risen to $464, up 102 percent. Aside from being a staple food in the Visayas and Mindanao, corn is also feeds for animals and a major ingredient in the manufacture of foods like coffee and chips.
Wheat, which is made into flour for the lowly pandesal and high end cakes, was priced at $201.70 per ton in 2019. It was up 159 percent to $522.3 per ton in May 2022. The other variety rose in price to $650.7.
Coffee Arabica has doubled in price to $5.85 per kilo from $2.88 in 2019. World sugar price was 28 cents per kilo in 2019. It reached 43 cents in May 2022, an increase of 53 percent.
Coconut oil averaged $736 per ton in 2019. It rose146 percent to $1,813 in May 2022.
As for fertilizers, urea in Eastern Europe averaged $245.30 per ton in 2019. It rose 188 percent to $707.5 in May 2022.
The World Bank’s Food Index for low and middle income countries, with 2010 as base year, has jumped from 87 in the whole of 2019 by May 2022 to 159, up 83 percent. The World Bank’s Fertilizer Index stood at 81.4 points in the whole of 2019. By April 2022, it hit a peak of 255, up 213 percent. Fertilizer prices tripled in just two years.
The atrocious prices of basic foods and the fertilizers used to increase their production indicate only one thing for the Filipino — worsening malnutrition and hunger and widening poverty.