Food prices soaring in developing world amid Ukraine crisis, World Bank finds | Business

Food inflation has soared across much of the developing world since Russia’s invasion of Ukraine and has trapped several wealthier countries in a cycle of price hikes, according to a World Bank report.

The Washington-based development organization said the war in eastern Europe would hit many countries with rising food bills worth more than 1% of their annual national income (GDP) , while others would not be able to contain the impact and would be submerged in a plenum. -Blood debt crisis.

Lebanon was hardest hit, the World Bank said, after an explosion at a food grain store in Beirut two years ago crippled the Mediterranean country’s ability to maintain and distribute corn and wheat to its 6, 8 million inhabitants.

Food inflation there reached 332% in the year to June, ahead of Zimbabwe’s 255% rise and Venezuela’s 155% rise. Turkey was fourth with a food inflation rate of 94%.

The gap between Lebanon’s food inflation and headline inflation, which produces a “real food inflation” figure, was lower at 122%, but remained the worst rate in the world, mainly because the spiral of energy costs pushed Lebanon’s general inflation rate above 150%.

An agreement last month between Ukraine and Russia, brokered by Turkey and the United Nations, to allow container ships carrying grain to leave Ukrainian ports helped lower commodity prices.

World Bank figures showed a dramatic reversal of cereal prices on world markets since June and a sharp fall in the price of other agricultural products to near lows seen last year.

On Monday, the Sierra Leone-flagged cargo ship Razoni left the Ukrainian port of Odesa carrying more than 26,000 tonnes of maize bound for Lebanon.

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The cost of rice has risen in recent months, but from a low level during the pandemic that bucked the trend of historically high price levels for wheat, barley and corn.

Last week, Bangladesh asked the International Monetary Fund (IMF) for financial support after a rise in the cost of imported food and energy threatened to undermine the South Asian country’s finances.

Bangladesh is understood to need about $4.5 billion (£3.6 billion), although only $1 billion to $1.5 billion is available under current IMF arrangements.

Sri Lanka has already asked the Washington fund for a bailout after running out of cash to buy vital imports, while a deal with Pakistan for a $6 billion IMF loan was revived in June.

Low food prices have sustained global growth in recent decades, offsetting the high cost for developing countries of debt service and fuel imports.

However, the World Bank said the shocking rise in food prices in recent months was affecting most economies, including those with relatively high incomes.

“The proportion of high-income countries with high inflation has also risen sharply, with around 78.6% experiencing high food price inflation.

“The most affected countries are in Africa, North America, Latin America, South Asia, Europe and Central Asia,” he said.

He also warned that major grain producers such as France, Spain and Italy would need to adjust to rising temperatures and uncertain weather patterns driven by the climate crisis to maintain high production levels.

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