Global Food Crisis: Is The Worst Ahead Of Us?
The global food crisis is here. Food supplies cannot keep up with demand. As a result, food prices soar, making it hard for people to put food on the table. For instance, in May 2022 the FAO Food Price Index reached 157.4, near a record high of 159.7 points from March. That's close to what some experts call the "boiling point," where societies descend into famine, chaos, and riots.
Does it mean that the worst is ahead of us?
"The current situation is worrisome, thanks to supply chain bottlenecks and the high transportation costs magnified by the Russian-Ukraine war," Athens Chamber of Commerce and Industry Counsellor Fanis Matsopoulos told International Business Times.
Matsopoulos' concerns are supported by a warning issued on Friday by the Food and Agricultural Organization of the United Nations that the fighting in Ukraine could push an additional 11 to 19 million to chronic hunger.
Then there's the natural tendency of the industries affected by food shortages to overstock. As a result, they could worsen the food crisis in the immediate future, according to Dawn Russell, Chief Customer Officer at supply chain solutions provider Blue Ridge.
"A global food crisis is here," Russell told IBT. "In times of volatility, businesses operating in affected industries have the natural reaction to increasing safety stock of scarce items."
Patrick Penfield, a professor of Supply Chain Management Practice at Syracuse University, thinks this is just the beginning stages of a global food crisis.
"The global food supply chain is 'stressed' and has been adversely impacted by weather events — droughts, extreme heat, floods, tornadoes, and cyclones — food growing issues such as the avian flu, bacteria, and disease. [There is also] COVID, Russia's invasion of Ukraine, high energy, fertilizer, and pesticide costs. These issues make it extremely difficult for food producers to grow crops and animals and produce products to ensure a steady global food supply," Penfield told IBT.
Penfield sees the situation worsening as the summer advances, especially for the developing countries of Africa and Asia, which rely on Ukraine wheat and corn, which cannot be shipped out of the country's ports due to the Russian blockade.
"Many small African and Asian countries that have received food supplies from Ukraine in the past will probably not be receiving those food supplies this year," he said.
Penfield also warned of the possibility of some countries in these regions facing starvation. He sees the situation worsening even for wealthier counties like the U.S., India, and China, as well as countries in Europe, in the form of unprecedented price hikes that will stretch well into the end of 2022.
What can be done to ease the crisis?
The immediate solution is to manage food stocks effectively.
"The U.S. food retail sector alone generates $18 billion per year in lost value due to overstock and spoilage with over 8 million tons of waste annually," Russell said. "When food security is in question, it's businesses' responsibility to optimize inventories to avoid further exacerbating the food crisis. We're seeing more and more organizations implement technologies that work to eliminate overstock entirely to feed those in need."
Then there's the near-term solution of shipping operators working with the U.N. to move wheat and corn supplies out of Ukrainian ports, a heroic task.
There's also the long-term solution of addressing climatic change, limiting what the world can produce -- a complex task that comes with great sacrifices.
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