The World Trade Organization (WTO) has lowered its global trade growth forecast for this year due to the Ukraine conflict.
The previous forecast of 4.7 percent growth has been lowered to 2.5 percent due to “the impact of the war and related policies,” according to WTO Director-General Dr. Ngozi Okonjo-Iweala.
The cut is also linked to ongoing global supply chain issues that resulted from the pandemic.
“My concern is that we have a brewing food crisis,” she said, adding that disruptions would make food more expensive.
Although Russia and Ukraine account for only about 2.5 percent of global merchandise exports, they are “very, very significant in certain sectors,” according to Dr Okonjo-Iweala.
“Of course, the first concern is for the people of Ukraine who are being displaced [and] do not have enough food to eat,” she explained.
She went on to say that the global economy would “suffer some severe consequences,” with poorer countries bearing the brunt of the shortages and “food supply constraints.”
Following Russia’s invasion of Ukraine, many food products, including wheat and corn, have been impacted.
Sunflower oil is in short supply in the EU, according to industry groups. According to S&P Global, Ukraine accounts for 46.9% of global exports and Russia for 29.9%, but with Ukraine’s ports closed, it is struggling to export.
Dr. Okonjo-Iweala warned, “I’m truly concerned about looming hunger, particularly in poor countries that can least afford it.”
Using Africa as an example, the former Nigerian finance minister stated that 35 of the 55 countries there imported wheat and other grains from Russia and Ukraine, as well as 22 countries imported fertilizer.
“Work done by the African Development Bank now shows that food prices are already rising by 20% to 50% in many countries,” she said.
