LONDON (Dispatches) - The Ukraine war has led the World Trade Organization (WTO) to cut its global trade growth forecast for this year.
The previous 4.7% growth forecast has been cut to 2.5% due to “the impact of the war and related policies”, said WTO boss Dr Ngozi Okonjo-Iweala.
The cut is also linked to continuing global supply chain problems that started as a result of the pandemic.
She said disruptions would make food more costly, saying “my worry is that we have a food crisis that is brewing”.
Dr Okonjo-Iweala told the media that although Russia and Ukraine only make up about 2.5% of global merchandise exports, they “are very, very significant in certain sectors”.
“The first worry, of course, is for the people of Ukraine, who are being displaced and not having enough food to eat,” she said.
She added the global economy was “going to suffer some severe consequences”, and said poorer countries would particularly feel the impact of the shortages, and “the supply constraints on food”.
Supplies of many food products including wheat and corn have been affected following Russia’s invasion of Ukraine.
Industry groups have warned the EU faces a shortage of sunflower oil. In total, 46.9% of global exports come from Ukraine and 29.9% from Russia according to S&P Global, but with Ukraine’s ports closed it is struggling to export it.
“I’m truly worried about looming hunger, particularly in poor countries that can least afford it,” Okonjo-Iweala warned.
Using Africa as an example, the former Nigerian finance minister said 35 of 55 countries there imported wheat and other grains from Russia and Ukraine and 22 imported fertilizer.
“Work being done by the African Development Bank now shows that in many countries, food prices are rising by 20% to 50% already,” she said.
However, Okonjo-Iweala said she was hopeful there were solutions to the supply problems.
She said in the short term countries could be “changing our dietary tastes” to eat more homegrown products.
She added in the longer term Africa was investing in “heat tolerant varieties of wheat and other crops” as it adapts to climate change.
As well as food prices surging, the cost of other commodities have hit record highs amid concerns the war and economic sanctions on Russia will lead to supply disruptions.