Governments around the world are reassuring that food stocks their are in satisfactory levels. However, the war in Ukraine shaping a new reality, with only a few countries ready to face it cereal shortages.
For important cerealsAs the wheat and corn, the global ratio of stocks to consumption – a measure of stocks as a percentage of annual demand – will be at 29% at the end of the year, according to forecasts by the Food and Agriculture Organization (FAO). The rate is lower than before the pandemic, though not alarming.
The problem is that countries with the largest portions of food in their warehouses are counted on the fingers. The US Department of Agriculture calculates that the China has the half the world’s stocks in wheat and 70% of corn.
After five consecutive record harvests, the India has almost 1/10 of the world’s wheat stocks. The USA hold 6% and 12% of world wheat and corn stocks, respectively.
The fact that the vast majority of the world’s food is found in only a few countries shows that all together the countries of North Africawhich are dependent on the import of cereals from the Black Sea, have only 5% of world wheat stocks.
With the largest reserves in the world, China is the best prepared country in the event of a global food crisis. Since 2008, Beijing has prioritized food security and built its vast reserves.
With the coronavirus pandemic, China has further increased its food imports. In 2020, it bought 26% more cereals and oilseeds than in 2019. Imports increased by another 11% in 2021 and continue to rise in the first months of 2022.
Countries with high reserves can avoid price increases brought about by Russia’s invasion of Ukraine. Thus, citizens will be protected from inflation and food price increases.
But the differences between the countries are huge. China announced in late 2021 that it has enough wheat for another 18 months. In fact, prices in the supermarket have fallen by 3.9% in February this year compared to last year.
In contrast, Egypt has stocks for just 4.5 months and countries such as Somalia and Benin are seeing their food supplies depleted. In the vast majority of countries around the world, supermarket goods have become more expensive.
In the myth of Aesop, the cicada sang in the summer and died of starvation in the winter, while the industrious ant had enough food. In the aftermath of the ongoing pandemic and war shocks, many countries may choose to follow the ant’s example.
moneyreview with information from WSJ
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