- Data shows that in many countries, food prices are rising by 20% to 50% already
- Most countries in the world relies on Russia for various products
Image: REUTERS/Gleb Garanich
The Ukraine war has led the World Trade Organization (WTO) to cut its global trade growth forecast for this year.
The previous 4.7 per cent growth forecast has been cut to 2.5% due to "the impact of the war and related policies", said WTO boss Ngozi Okonjo-Iweala.
The cut is also linked to continuing global supply chain problems that started as a result of the pandemic.
She said disruptions would make food more costly, saying "my worry is that we have a food crisis that is brewing".
Okonjo-Iweala told the BBC that although Russia and Ukraine only make up about 2.5 per cent 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.
She added the global economy was "going to suffer some severe consequences", and said poorer countries would particularly feel the impact of the shortages, and "the supply constraints on food".
Supplies of many food products including wheat and corn have been affected following Russia's invasion of Ukraine.
Industry groups have warned that the EU faces a shortage of sunflower oil. In total, 46.9 per cent of global exports come from Ukraine and 29.9per cent from Russia according to S&P Global, but with Ukraine's ports closed it is struggling to export it.
"I'm truly worried about looming hunger, particularly in poor countries that can least afford it," Okonjo-Iweala warned.
Using Africa as an example, the former Nigerian finance minister said 35 of 55 countries there 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% to 50% already," she said.
However, Okonjo-Iweala said she was hopeful there were solutions to the supply problems.
She said in the short term countries could be "changing our dietary tastes" to eat more homegrown products.
She added that in the longer-term Africa was investing in "heat-tolerant varieties of wheat and other crops" as it adapts to climate change.
As well as food prices surging, the cost of other commodities has hit record highs amid concerns that the war and economic sanctions on Russia will lead to supply disruptions.
Russia's mining industry is hugely important for many substances such as palladium, which is responsible for 40per cent of the global production of the metal that is essential for carmakers.
Even before the war in Ukraine, the pandemic had caused a mismatch between supply and demand in many industries which pushed prices up, and the International Monetary Fund has warned that soaring inflation will reduce global economic growth this year.
"In the short to medium term, I think that we are going to see these inflationary pressures continue," Okonjo-Iweala said.