Global food prices stay near record as Ukraine war upends trade

Global food prices stayed near a record as Russia’s invasion of Ukraine disrupted trade, fueling hunger and worsening a cost-of-living crisis.

Russia’s invasion has sharply reduced exports from Ukraine, one of the world’s biggest grain and vegetable oil shippers. The blockade of key Black Sea ports has exacerbated supply-chain turmoil, sending prices soaring and prompting the United Nations to warn that food shortages may spur millions of people to migrate.

A UN gauge of global food costs fell 0.6% in May from the previous month. Vegetable oil prices declined 3.5%, partly due to the removal of Indonesia’s export ban on palm oil, the UN’s Food and Agriculture Organization said.

Farmers are facing record high energy and input costs, and the UN has said a lack of fertilizer could deepen the food crisis in 2023. Food prices were already high due to logistics snarl-ups and a rebound in demand after the pandemic. Food inflation is hitting the hardest in poor countries where groceries make up a large share of consumer budgets.

The UN food price index soared 13% in March, its fastest pace on record, immediately after Russia’s attack, before declining slightly in April as demand for vegetable oil fell and corn prices weakened. 

Vegetable oil and grain prices have been whipsawed by protectionist measures as countries have sought to protect their own markets. Malaysia has banned chicken exports, while India has moved to curb wheat and sugar shipments.