Page 34 - bne IntelliNews monthly magazine October 2024

34 I Cover story bne October 2024
"The German market depends on fish from Russia. We cannot do without saury and cod," explained Steffen Meyer, director of the Federal Association of the German Fish Industry and Wholesale Trade. Russia itself set a record for seafood exports in 2023 and is projected to earn $5.6bn in 2024, after exports were redirected to Asia.
The FAO Food Price Index (FFPI) has been declining since its spiked in March 2022, caused by the start of the war in Ukraine. However, while global prices have eased, food price inflation remains a serious problem, particularly in low- and middle-income countries. For example, food price inflation was still above 30% in several nations, such as Ethiopia, Ghana and Sudan, by late 2023. High-income countries have seen a slower rise in food costs, with inflation dropping to around 3.8% by late 2023, according to IFPRI, but the relentless rise is adding to the cost- of-living crisis in Europe.
As bne IntelliNews reported, over a billion people's food supplies around the world are threatened by the accelerating climate crisis and up to 4bn people are now suffering from poor nutrition in some
of the poorest countries in the world.
India suffered from a rice crisis last year, adding to the overall price increases as extreme temperatures saw yields plunge there too, causing the government to ban exports to prevent
FAO Food Price Index
2015 93.0
2016 91.9
2017 98.0
2018 95.9
2019 95.1
2020 98.1
a price spike. The tomato crop in India failed completely. Food insecurity is not only caused by the lack of food, but also spikes which increase food prices to beyond the level the poorest members of society can afford to pay. Grain yields in both Ukraine and Russia have been falling in the last two years.
Russia brought in a record harvest of 153mn tonnes, smashing even Soviet-era records, in 2023, but this year the harvest is expected to fall back to 132mn tonnes as yields retreat due to the extreme temperatures following the hottest summer on record in 2024. The way agricultural markets work, if Russia's export grain price firms then grain prices around the world rise as well.
Climate crisis-driven global food security has already deteriorated between 2019 and 2022 and is even already affecting the US and Europe, where agricultural yields are down by more than 30%, according to scientists. Storms in Europe destroyed €9.1bn worth of property
in 2023, while the US saw 28 separate weather disasters costing at least $1bn
a piece. When the results come in from this year, including the destruction caused by Storm Boris, they are likely to be worse. Scientists predict that
the frequency and power of extreme weather events during what will now be an annual disaster season will only get worse from here.
Estimates vary, but recent studies published in Nature Food, NASA and Springer Link, estimated strained population will demand 35% – 56% more food from crops that will yield dramatically less and be less dense in key nutrients. After some short-term gains for Europe (as a warmer Europe means more winter crops), food security is only going to become a bigger issue as time goes on and Russia’s massive surplus of grain production more important.
The record-breaking heatwaves and prolonged droughts in Europe in the last two years have hit Southern and Eastern Europe more than the North, reducing yields in crops like wheat, maize and barley. The European Commission reported that the 2022 drought reduced cereal yields by 10%, with maize production falling by nearly 16%, according to the World Bank.
Some regions, particularly in Northern Europe, may initially benefit from warmer temperatures, allowing for extended growing seasons. However, the long-term consequences of more frequent extreme weather events outweigh these benefits, says IFPRI. Wheat yields have been particularly vulnerable to heatwaves and droughts. France, one of the EU’s largest wheat producers, has seen reduced yields in recent years. The drought of 2022 was particularly damaging, with wheat yields falling by 5-10% across Europe.
Ukrainian and Russian grain production, mn tonnes
Year
FAO Food Price Index (2014-2016 = 100)
2021
2022
2023
2024 (YTD)
125.7
160.3
124.7
120.7
Source: UN Food and Agriculture Organization
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