Export controls may trigger a new global food crisis, warns WB chief 

An alarming global surge in government controls on food export, triggered by the war in Ukraine, is making a global food crisis more likely, warned World Bank Group President David Malpass, urging global policymakers to halt the trend.

"It's time to defuse the danger. A global food crisis is by no means inevitable," he said, as global stocks of rice, wheat and maize remain high by historical standards.

A total of 35 countries have so far slapped restrictions on food export, marking a 25% jump in the number of such governments within a few weeks since the war in Ukraine broke out, he pointed out in a post on the group's blog on 8 April.  

By the end of March, 53 new policy interventions affecting food trade had been imposed – of which 31 restricted exports, and nine involved curbs on wheat exports, according to the latest data.

"History shows that such restrictions are counterproductive in the most tragic ways," he wrote, citing how such measures drove up wheat prices by a whopping 30% a decade ago, exacerbating the global food crisis.

In a time of rising economic and geopolitical stress, maintaining global flows of food should be a minimum requirement for policymakers everywhere, he felt.

The World Bank president explained why the food crisis is devastating for the poorest and most vulnerable people mainly those in the world's poorest countries which tend to be food-importing countries. 

Food accounts for at least half of the total expenditures of households in low-income countries, said the economist who had served as under secretary of the US Treasury for International Affairs before taking charge of WB group chief on 9 April 2019.

Russia topped the list of global wheat exporters followed by the USA, Canada, France and Ukraine in 2020.

"If any of the top five exporters of wheat were to ban exports, the cumulative effect of these measures would be to increase the world price by at least 13% – and much more if others react," he wrote, sharing his concerns about "multiplier effect" on global supply and international and domestic prices.

However, for now, restrictive measures are not as extensive as those put in a decade or so ago – encompassing 21% of the world wheat trade now compared to 74% in the 2008-2011 period.  

"But conditions are ripe for a retaliatory cycle in which the scale of restrictions could grow rapidly," he warned, citing how Russian restrictions on wheat exports to countries outside the Eurasian Economic Union caused worries for countries like Egypt who depend on wheat from Russia and Ukraine.

He referred to the pledge of the G7, which includes major food exporters like the US, Canada and the EU, not to impose a food export ban and urged other exporters like Australia, Argentina and Brazil to join.