War raises risk of food insecurity in the world, says Davos report

The war in Ukraine increases the risk of food shortages on the planet. The warning was made by chief economists at 24 of the largest banks and is included in a report released this Monday (23) by the World Economic Forum. In this scenario, Brazil is cited as a country that suffers and spreads the effects of war.

For the chief economists interviewed by the Forum, the scenario poses the risk of an even greater rise in food prices around the world, with consequences for indicators of hunger and the cost of living.

Economists note that the war has destabilized the supply chain for several important foods, especially wheat. In 2020, 36 countries bought more than 50% of wheat imported from Russia or Ukraine. For these nations, the difficulties in shipping the commodity with the war directly affected supply — not only with the soaring prices, but also with the availability of the product.

But this effect is not limited to wheat, and Brazil is an example of this. The Economic Forum document cites a World Bank study that shows how integrated commodity chains can propagate the effect of war.

“As the world’s largest soybean producer, Brazil imports about half of the potassium fertilizer from Ukraine and Russia. China, then, imports soybeans from Brazil to feed livestock, which can affect the price of meat in China and in the world”, cites the document.

The report also mentions that some countries have already adopted measures to restrict exports, such as Indonesia, which has restricted the shipment of palm oil. “In reaction to the falling world food supply, restrictions on exports are being adopted in the name of national interests.”

Faced with this scenario, the select group of economists argues that food security is one of the issues that must be closely monitored in the future of the global economy. Among the other topics that deserve attention are inflation and income, global integration and the impact of sanctions on Russia, among others.