Rising global food prices, exacerbated by grain and fertilizer shortages produced by the war in Ukraine, are not only hurting households, but posing risks for multinational businesses, The Wall Street Journal reported Thursday (Aug. 11).
One threat, according to the Journal, is that surging food prices will spark political unrest.
“Food insecurity is one of our company’s main topics and one of the things you really have to look out for — there’s no getting away from it,” Srdjan Todorovic, who oversees analysis of terrorism and related threats at Allianz Global Corporate & Specialty, part of German financial service company Allianz, told the Journal. “This is absolutely a global problem.”
Unlike other shortages, food shortages quickly test a population’s willingness to abide by laws, said Nick Robson of Marsh, a subsidiary of insurance broker Marsh & McLennan Cos.
Some countries are at greater risk than others, Robson said. Poor countries, of course, but also autocracies and nations which large food imports. Businesses in more secure nations would still be vulnerable from their operations in higher-risk countries.
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A United Nations report cited by the Journal indicated that 2007 and 2008 food crises caused upheaval in 48 countries, and prices then were not as high as today’s.
While food prices are below peaks reached just after Russia invaded Ukraine, they still are 44% higher than they were in 2020, according to an index cited by the Journal and maintained by the U.N.’s Food and Agricultural Organization.
Jimena Blanco, head Americas research risk-intelligence company Verisk Maplecroft, said, “We’re seeing across the world a much higher potential exposure to civil unrest as people see their purchasing power falling quickly.”
Already rising prices of fertilizer have sparked protests by farmer and truckers in Greece and Peru. In Sri Lanka, protests over anti-chemical fertilizer rules that had the effect of hurting yields led to protests that forced out the country’s leader.
A Marsh report concludes that 50 or more countries get at least 30% of their grain from Russia and Ukraine.