A World Bank report found that food inflation has soared in most developing countries since Russia’s invasion of Ukraine and trapped many wealthy countries in a cycle of rising prices.
The Washington-based development organization said the war in Eastern Europe would affect many countries with increases in food bills of more than 1% of their annual national income (GDP), while others would fail to control the effect and sink completely. Will go Debt crisis.
Lebanon was worst affected, the World Bank said, after a food-stock explosion in Beirut two years ago crippled the Mediterranean country’s ability to store and distribute corn and wheat to 6.8 million people.
Food inflation reached 332% in June of the year, ahead of Zimbabwe’s 255% and Venezuela’s 155%. Turkey was ranked fourth with a food inflation rate of 94%.
The gap between Lebanon’s food inflation and general inflation – which produces the figure for “real food inflation” – was low at 122%, but remained the worst rate in the world, mainly because rising energy costs increased Lebanon’s general inflation rate. pushed above 150%.
A deal last month between Ukraine and Russia, brokered by Turkey and the United Nations, allowed container ships carrying grain to leave Ukrainian ports helped bring down commodity prices.
World Bank data showed a dramatic reversal in grain prices in global markets since June and prices of other agricultural products fell less than last year.
On Monday, the Sierra Leone-flagged cargo ship Rajoni dropped more than 26,000 tonnes of corn from the Ukrainian port of Odessa to Lebanon.
The cost of rice has increased in recent months, but from low levels during the pandemic, which bucked the trend of historically high price levels for wheat, barley and maize.
Last week Bangladesh called on the International Monetary Fund (IMF) for financial aid after rising costs of imported food and energy crippled the finances of South Asian countries.
Bangladesh is understood to need around $4.5bn (£3.6bn), although only $1bn-$1.5bn is available under current IMF arrangements.
Sri Lanka has already asked the Washington-based fund for a bailout after it ran out of cash to buy vital imports, while a deal with Pakistan for a $6bn IMF loan was revived in June.
Low food prices have stymied global growth in recent decades, forcing developing countries to offset their debt and the high cost of fuel imports.
However, the World Bank said the sharp rise in food prices in recent months is affecting most economies, including those with relatively high incomes.
“The share of high-income countries with high inflation also increased sharply, with about 78.6% experiencing high food price inflation.
“The most affected countries are in Africa, North America, Latin America, South Asia, Europe and Central Asia,” it said.
It also warned that large producers of cereals, including France, Spain and Italy, would need to adjust to uncertain weather patterns driven by rising temperatures and the climate crisis to maintain high levels of production.