Food Challenges – IAPH Initiative – Opportunities – Building to a Higher Level

The recent UNCTAD so-called rapid assessment report on the war in Ukraine highlights concerns over the two fundamental “Fs” of commodity markets – food and fuels.

The general picture presented confirms a rapidly worsening outlook for the world economy underpinned by rising fuel, food and fertilizer prices.

UNCTAD points out Ukraine and Russia are global players in agri-food markets, representing 53 per cent of global trade in sunflower oil and seeds and 27 per cent in wheat. Factoring this in and the disruption to export activities caused by the war – Ukraine’s ports are entirely closed – UNCTAD states the situation is “especially alarming for developing nations.” It underlines: “As many as 25 African countries, including many least developed countries import more than one third of their wheat from the two countries at war. For 15 of them,” it says, “the share is over half.”

The assessment goes on to suggest, as highlighted in PS’s own detailed assessment of the grain sector featured in this issue – Grain: A Price to Pay for War, that the consequences of substantial price hikes with agri-products and disrupted sources of supply are potentially far reaching. It concurs with the thinking in our article when we say: “It may be that the greatest number of casualties from Russia’s adventure will be those who starve in the Developing World.”

Not of course to undermine in any way the suffering that is taking place on the ground in Ukraine, as highlighted by the dreadful situation in the port city of Mariupol. Indeed, to digress for a moment PS would like to draw your attention to the recent initiative undertaken by the International Association of Ports & Harbours who have teamed up with The Seafarers’ Charity to raise much-needed funds to support Ukrainian port workers who have been impacted by the terrible war in their country. Full details of this initiative can be found here including how to donate: https://bit.ly/PortWorkersAppeal

Like ourselves, UNCTAD further concludes that food shortages have the potential to lead to civil unrest. “Agri-food commodity cycles, for example, have coincided with major political events, such as the 2007-2008 food riots and the 2011 Arab Spring,” it stresses.

This issue of PS also provides a view of the current and potential future status of the multi-purpose and heavy lift sector as well as offers insight into the future of European container trades as set out in a new report from Royal HaskoningDHV. Across the board, challenges are referenced but also, thankfully, bright spots with more highlighted in the two country reviews, Vietnam and Brazil. Both cite significant growth trends, investment activity and a range of business opportunities.

The tenor of the UNCTAD report is pessimistic, and clearly there are significant structural challenges in play, but against this it is notable that the visibility and importance of the shipping, transport and logistics sector is, as a result of COVID-19 and the Ukraine War, much higher up the scale. Going forward it is to be hoped that this will play its part in funding and shaping an industry that offers higher levels of efficiency and can better maintain these in the face of exceptional circumstances.