Posted on October, 19, 2022 at 04:07 am
THE United Nations Conference on Trade and Development (Unctad) said renewing the Black Sea Grain Initiative, ending trade restrictions and facilitating exports will boost trade and logistics and ensure food for all.
Unctad Secretary-General Rebeca Grynspan said the rising trade costs, especially in maritime transport, have contributed to increased food and energy prices that have hit record levels this year.
Unctad research showed that logistics costs alone accounted for at least half of the rise in food prices at the start of the year. Trade restrictions, which now cover about 10 percent of all calories traded worldwide, have limited global supplies.
With the combined effects of the Covid-19 pandemic, climate emergency and Russia-Ukraine conflict, the accelerated global cost-of-living crisis could plunge tens of millions more people across the world into hunger and poverty this year. Since Europe now has to import gas on ships instead of through pipes, changes in trade are also affecting the natural gas market.
Grynspan said the UN-backed Black Sea Grain Initiative signed in July 2022 to resume exports of Ukrainian grain via the Black Sea, amid the ongoing war has shown the power of trade in times of crisis.
The total tonnage of grain and other foodstuffs exported through the initiative had surpassed 7 million metric tons, as of October 12.
"The opening of the Black Sea grain corridor, as well as the effort to bring food and fertilizers from Russia to the global markets, has presided over a six-month consecutive decline in the FAO Food Price Index," she said. The initiative's effect began before it was signed.
"In a context where trade is very uncertain, signals matter very much," she said.
Every percentage increase in the price of food can push 10 million people into poverty, according to World Bank estimates.
Grynspan said the Black Sea Grain initiative has had a tremendous welfare effect.
"By unblocking just one trade route, we have avoided over a hundred million people from falling into poverty," Grynspan said, as she sought the renewal of the initiative, which expires next month.
"The private sector is anxious about the looming deadline. When there is no clarity, no one knows what is going to happen, and speculation and hoarding take over," she said.
"Efforts must be made to shorten supply chains, particularly for food. This includes fostering regional supply chains, she added.
Grynspan said trade solutions are needed to counter the current crises. These include ending trade restrictions from global suppliers, managing demand to avoid a scramble for commodities, especially energy, and facilitating fertilizer exports to support farmers everywhere to produce food.
She called for multilateral and system solutions and asked decision-makers to maintain a long-term perspective while taking short-term actions.
"We are living today with the consequences of not having taken the right decisions before. Let's not make the same mistake again," she said.
Source: Manila Times