Attachments
Authors:
Arif Husain, Chief Economist and Director of Research Assessment and Monitoring Division (RAM)
Friederike Greb, Economist RAM
Stefan Meyer, Economist RAM
Summary
The World Food Programme (WFP) estimates the increase in acute hunger following the Ukraine conflict, modelling the pass-through of price increases on global grain and energy markets from international to domestic markets and the ensuing loss of access to food by those who could barely afford a minimal diet before the conflict-driven price rises. We examine two scenarios: for the conflict ending within the next month, and continuing beyond April 2022. For the 81 countries with WFP operations, we find that acute hunger will rise by an additional 33 million people in the first scenario and an additional 47 million people in the second scenario, from a pre-war baseline of 276 million people who were already in the grip of acute hunger. Altogether, this means that up to 323 million people could become acutely food insecure in 2022.
Introduction
Through Ukraine and Russia’s links to the rest of the world, the conflict in Ukraine has implications for food security far beyond the Black Sea. Some countries are impacted because of particular economic ties to Russia – for example Cuba or neighbouring Kyrgyzstan and Tajikistan, which heavily depend on remittances from Russia. Arguably the most important impact pathway from the war in Ukraine to world hunger, however, runs through the conflict’s impact on global grain and energy markets. Both Ukraine and Russia are key players in highly concentrated international wheat and maize markets. The expected shortfall in supplies has caused further price hikes for these food commodities. Moreover, Russia plays a critical role in global oil and gas markets, which has led to energy price hikes and heightened volatility since the onset of the conflict. As these price increases transmit to local markets in poor countries, those previously barely able to afford an energy-sufficient diet won’t have enough money to do so anymore.
With food prices on a relentless rise since mid-2020, the additional pressure due to the conflict has pushed prices into the realms of the 2008 and 2011 food price crises. FAO’s Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, reached a new all-time high in February 2022 – and prices remained volatile since then.