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In the foreseeable future, popular food products such as different kinds of oil and cereals may be in short supply, Business Insider noted.
What is more, analysts at Business Insider believe that the world is now shifting to the era of food protectionism. Mounting protectionism is fueling chaos in global food markets with countries clamping down on exports of staples including grains, cooking oil, and pulses. They have to take such steps to protect their inventories against the backdrop of rising inflation.
Russia and Ukraine have already introduced restrictions on the exports of wheat and sunflower oil. Indonesia, Argentina, and Kazakhstan halted overseas sales of essential products to curb soaring domestic prices.
Governments may exacerbate protectionist measures because of growing food prices. In the Asian countries, there could be a new spike in inflation and food costs, Nomura economists stressed.
Notably, record high prices of crops occurred during the global financial crisis of 2008. At that time, Ukraine and other major suppliers reduced grain exports, whereas India and Vietnam restricted rice exports. Business Insider fears that the past may repeat itself. Such measures will only inflate prices, bringing the world closer to a food crisis.
According to the US Department of Agriculture (USDA), Russia is currently the largest global wheat exporter, accounting for 20% of global grain exports. Against the backdrop of the Russia-Ukraine conflict, the country has imposed a number of restrictions on food exports, including a temporary ban on wheat supplies.
Sugar and sunflower seeds are other crucial products whose exports from Russia has been suspended. The restrictions will be valid from April to August 2022. Apart from that, the country has introduced an export quota for sunflower oil in order to curb surging inflation.
Ukraine, the fifth-largest global wheat exporter, also banned overseas sales of some staples. The government refused to export essential products such as wheat and oats.
Indonesia, the world's top palm oil producer, banned exports of the most widely used vegetable oil. The halting of shipments of the cooking oil and its raw material came as a measure to avoid oil shortage in the domestic market. Retail prices for palm oil skyrocketed by 40% in 2022.
Argentina, the world's fifth-largest beef exporter, temporarily halted its export of beef in a move to quell a runaway inflation in the country. In 2021, inflation in Argentina hit 50.9%, Reuters pointed out.
Kazakhstan also restricted the exports of wheat and wheat flour following a 30% increase in domestic prices. The ban will remain in force until June 15 of this year. Kazakhstan is the largest exporter of wheat, accounting for 4% of global supplies.
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