The global food supply is taking a hit recently, and it's being felt around the world, from the Malaysian markets to the cafés in France.
Most people blame the war in Ukraine for interrupting supply and sent food prices spiralling. Partially to be blamed, yes, as Ukraine and the Russian Federation together exporting 30% of the cereals and 67% of sunflower oil in the world.
But this is not the sole cause of the shortage. Sara Menker, CEO of Gro Intelligence cited 5 major factors occurring simultaneously that also cause the shortage:
💣 Lack of fertilizer
💣 Climate disruptions
💣 Record-low inventories in cooking oils
💣 Record-low inventories of grains
💣 Logistical bottlenecks that already have started to unravel decades of global economic progress.
❗❗ FUN FACTS ❗❗
▶️ Global fertilizer prices have nearly tripled Y-o-Y and quadrupled over the past 2 years due to supply shocks driven by logistical bottlenecks and restrictions on natural gas.
▶️ Global drought conditions for wheat are the worst in over 20 years around the world. The US and Brazil, the world’s 2 largest exporters of agricultural products, are experiencing extreme droughts.
▶️ COVID-19 related labour shortages - changing demographics like ageing and retiring workers are a factor behind the shortages, as well as border controls and immigration limits, and demands for better pay and flexible working arrangements.
▶️ Steadily increasing demand from the biofuel industry. Countries are reconsidering biofuel mandates, which dictate the amount of vegetable oils that must be blended with fuel. For example, in the US, 42% of soybean oil goes toward biofuel production.