As a result of the war brought upon Ukraine by the Russian invasion, the World Trade Organisation (WTO) decided to cut its global trade growth forecast for 2022 by as much as 50 percent.
Nearly half of Polish firms see Ukraine war as business threat
Previously estimated at 4.7 percent, the growth forecast has been cut to 2.5 percent due to “the impact of the war and related policies”, WTO head Dr Ngozi Okonjo-Iweala said.
The downsizing on the part of WTO also results from the continuous relative disruption of global supply chains resulting from the COVID-19 pandemic.
Dr Okonjo-Iweala said that the two calamities would make food more costly, adding: “my worry is that we have a food crisis that is brewing”.
The official told the BBC that although Russia and Ukraine only make up about 2.5% of global merchandise exports, they “are very, very significant in certain sectors”.
“The first worry, of course, is for the people of Ukraine, who are being displaced [and] not having enough food to eat,” she said.
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Africa, Middle East, Europe to suffer from a likely food crisis
Supplies of many food products including wheat and corn have been affected following Russia’s invasion of Ukraine. Some countries, noteworthily African and Middle Eastern countries, rely heavily on crops imports from the warring countries. Egypt, for instance, is the largest importer of Russia’s wheat. In 2021, almost 80 percent of Egypt’s wheat came from Russia and Ukraine, 69.4 percent and 10.7 percent respectively.
But the war-incited food crisis may also mark its presence in Europe. Industry groups have warned that the EU faces a shortage of sunflower oil. In total, 46.9 percent of global exports come from war-engulfed Ukraine, whereas 29.9 percent originate from Russia according to S&P Global. Now with Ukraine’s ports blocked the country is struggling to export its sunflower oil.
“I’m truly worried about looming hunger, particularly in poor countries that can least afford it,” Dr Okonjo-Iweala said.
The former Nigerian finance minister resorted to Africa to exemplify her concerns, saying that 35 of 55 countries on the continent imported wheat and other grains from Russia and Ukraine and 22 imported fertiliser.
“Work being done by the African Development Bank now shows that in many countries, food prices are rising by 20 percent to 50 percent already,” she said.
Still, the official shared her hopes that some solutions to the impending crisis could be found. For instance, in the short term countries could modify their residents’ “dietary tastes” so that they are based more on homegrown products.
In the long term, Africa was investing in “heat-tolerant varieties of wheat and other crops” as it adapts to climate change.
Russia’s invasion to influence cars production
The cost of other commodities has already soared to record highs to the tune of global concerns that Russia’s war against Ukraine will further disrupt supply chains. Carmakers are expected to suffer, as Russia’s mining industry provides a substance of paramount importance to the car production business, namely palladium. It is Russia that is responsible for 40 percent of the global production of this metal.
As the scissors of supply and demand have been ever more open with each day, prices continue to grow. The International Monetary Fund has already warned that soaring inflation will reduce global economic growth this year.
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