The head of the UN food organization spoke about the threat of hunger and the position on the grain deal

Due to the events in Ukraine, as well as large-scale sanctions imposed by the West against Russia, global grain supplies were disrupted, which increased the severity of the food crisis in several countries of the world. The so-called grain deal was called to correct the situation. The agreement provided for the creation of safe sea corridors for the export of Ukrainian grain under the supervision of observers from Turkey and the UN.

However, not all countries and members of the expert community shared the official position. Many still believe that the provisions of the document are not aimed at helping the poorest countries and stabilizing the world wheat market. Thus, the Kremlin recently thought about withdrawing from the grain deal, as they do not see “special prospects”, since the entire Russian part of the agreement is not being implemented. This was stated by the press secretary of the President Dmitry Peskov.

“Cereal prices continue to fall”

– Are the UN and FAO counting on the extension of the grain deal?

– The UN, through its Secretary General António Guterres and Deputy Secretary General for Humanitarian Affairs Martin Griffiths, has repeatedly spoken out about the grain deal. This agreement was concluded with the help of the “big” UN, that is, directly from New York. Geneva is also dealing with this issue, represented by the Director General of the UN Conference on Trade and Development, Rebeca Greenspan. FAO is not a “procedural entity” here. Yes, our statistics on grain production and trade are used, but here the position of the FAO does not differ from the position of the UN. The agreement contributes to the stabilization of the world food market, the predictability of supplies, as well as food prices. Of course, we express the hope, as an organization that is globally responsible for nutrition and food issues, that this set of agreements will once again be extended for a new period (currently the deal is valid until July 17. – L.A.). This will allow markets to behave more calmly, and consumers in all countries – importers of both Russian and Ukrainian food – to feel more confident.

But not all experts share this point of view. For example, the head of the Russian Grain Union (RGU), Arkady Zlochevsky, earlier in an interview with MK said that the implementation of the agreement would not be able to help residents of African and Latin American countries, since the agreement led to a wild increase in wheat prices.

— I have not seen such information that the grain deal allegedly provoked a rise in prices. And the statistics say otherwise. Grain prices have continued to decline for almost a year now. In May 2023, in general, grain prices fell by more than 6% (according to the FAO Food Price Index). The cost of corn fell by almost 9%, barley – by 8%. This suggests that the grain deal is having a stabilizing effect on the global food market. But it must be remembered that less than 20% of the grown grains are sold through international trade channels, the rest is consumed within the producing countries. Of this volume (20%), Russian and Ukrainian combined exports account for about 10%, but nevertheless, on a global scale, this is a large amount. The issues of stability of these deliveries have a significant impact on the world grain market.

— How has Russian wheat export changed under sanctions? Does it help in world price balancing?

– Russia in the conditions of restrictions finds new sales markets. There are countries that are interested in importing Russian wheat and other food groups. On the whole, one cannot speak of a reduction in Russian grain exports over the past trading year.

“Reserves cannot be kept indefinitely”

— FAO regularly maintains a food price index for five main commodity groups: cereals, vegetable oils, meat, dairy products and sugar. Which products are currently the most expensive or are at risk?

— The basis of the world consumer basket is grain. And since grain is, in addition to food for people, also feed for livestock and poultry, the rise in prices for grains entails an increase in prices for meat, dairy products, and vegetable oils. In fact, for all product groups. However, the highest prices were only in April 2022, since then they have been declining. According to the latest statistics that we have (for May 2023), prices have decreased for grains, vegetable oils and dairy products. Slightly, about 1%, increased the price of meat, as well as sugar, but this is not related to the situation in Ukraine. This is a global situation. If we talk about the dynamics of Russian prices, their growth has also slowed down. As for grains specifically, it should be taken into account that large reserves have been accumulated in the world. Many countries have accumulated reserves that cannot be stored indefinitely and must be sold. Therefore, the dynamics in the market of grain and vegetable oils is very positive.

– You just talked about the global trend. But let’s focus exclusively on the situation inside Russia. What’s going on with our prices?

– In Russia, as you know, there was an increase in inflation. It hit double digits last year. This year the result is predicted – 4-5%. Food prices have risen, as they have all over the world, but now their growth has slowed down. The cost of products is positively affected, in particular, by the seasonal factor. Now for the grain. In total, taking into account the climatic conditions and last year’s super-harvest, which has yet to be sold, the sown area has decreased somewhat. Weather conditions this year are less favorable: in many regions late spring and summer, somewhere the crops were destroyed by hail. In general, forecasts for the grain harvest are about 120 million tons, which exceeds both domestic and export needs in excess.

— How is the situation with grain supply in the world?

– A number of countries are able to fully provide for themselves. For example, the USA, Canada, where a significant increase in area is possible this season: there are capacities, seeds, and fertilizers. Many European countries can also boast of being self-sufficient. Another thing is that the price of production there is very high, the cost per unit of production is higher than in the same USA, Canada, Brazil. Therefore, it is often cheaper for European countries to buy grain than to produce it themselves. It cannot be said that some new trader has now entered the grain market. Most likely, we can talk about the disposal of reserves. Last year, some countries withheld export deliveries to accumulate these reserves. Today the situation for wheat, corn, soybeans is more favorable. Problems are observed with rice. Climate-wise, forecasts for the rice harvest this year are less favorable. Countries such as India and Vietnam are holding back rice supplies. For grains, the only thing that is growing now is the price of rice.

“Food cards are the most advanced form of social assistance”

– In Russia, they now and then offer to introduce food cards. Check out this way to fight hunger. How does FAO view this type of support for those in need?

“Even in the most developed countries, there is a significant proportion of the population that does not have enough income to feed themselves and their families. Helping these citizens is a social function of the state. How and in what form is irrelevant. This could be cash benefits or food stamps or food stamps. But ration cards are the most advanced form to date. To control the intended use, you can limit the list of products that can be paid for by them (without alcohol and tobacco, for example).

— Can we say that the risk of a global food crisis is decreasing? Is it realistic to eliminate the problem of hunger in the coming years?

– The food crisis on the planet is not the first year. The situation when every tenth of its inhabitants goes hungry (828 million people in 2021), being not sure that they will get their daily bread tomorrow, is unacceptable. In general, in order not to lose optimism, favorable conditions are needed: cooperation of all states, reduction of armed conflicts and preventing the growth of new ones, solving the problem of climate change, as well as stabilizing the financial and economic system. But so far there are no big reasons for optimism. The scale of hunger is reduced only due to the fact that population growth outstrips it, and those who live poorly continue to live poorly.

Nevertheless, the goal of eliminating world hunger by 2030, set by the UN, is not removed. In these remaining years, we must do everything to “level our boat”, so that in the next period we will finally save humanity from hunger during the lifetime of this generation.