War on the dinner table

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War on the dinner table

Choi Ji-young
The author is an economic news editor of the JoongAng Ilbo.

Shop owners have begun to stock up on flour before the prices of ingredients for popular dishes — noodles, dumpling and bread — shoot up. A surge in prices is worrying everyone. They fear the cost of food could rise faster than expected.

In a column in November, I wrote about the possibility of larger ramifications from a food crunch than the shortage of diesel exhaust fluid (DEF). Sadly, that worry has come true.

The signs of instability in food prices had already shown. Crop yields and shipments had been hurt from drought and other weather disasters caused by climate change and shipping disruptions from the Covid-19 pandemic. An unimagined war has aggravated that situation.

The government at the time predicted the Russian invasion of Ukraine would have limited impact on food. Initially, the government said the impact would be “small” as grain imports from Russia and Ukraine took up only 10 percent of total imports over the last three years. But it was wishful thinking.

In the early stages of the war, the government estimated Russian and Ukrainian flour for feed for livestock would last until July and corn until mid-June.

But the war has been stretched beyond expectations. The Russian-Ukraine war has caused a butterfly effect of a global food shortage stemming from price rises in crude oil, flour, barley and corn, and a shortage of fertilizers that led to the delay in sowing and farming — and then a shortage in feed and a rise in livestock prices.

According to the New York Times, global wheat prices jumped 21 percent, barley 33 percent and some fertilizers 40 percent over the last month since the Russian invasion. The recent spike adds to a 69-percent surge in prices of wheat, 36 percent in corn and 82 percent in barley last year.

The fertilizer issue has become serious. Russia is responsible for 15 percent of global fertilizer supplies. It already announced that it would stop exports from March. Many big fertilizer producers have scaled back output due to a surge in fuel costs before the war started. Fertilizers are made from ammonia, which is based on natural gas.

Brazil, the world’s largest bean producer, cannot import the potassium carbonate necessary for bean production due to sanctions. Belarus, a major exporter of potash fertilizer, is also under international sanctions for backing Russia’s invasion of Ukraine. Brazilian beans mostly go to China for livestock feed.

Since fertilizer use has been cut back from Brazil to Texas, food output inevitably has been impacted. The World Food Program has warned the world faces a “hunger pandemic of biblical proportions” and the worst humanitarian catastrophe since the Second World War.

Korea may have to fight over grain in the international market with the world’s most populated China and India. China and India have gone all-out to grab the limited wheat available in the global market. Tang Renjian — the minister of agriculture and rural affairs of China, the world’s biggest flour producer and consumer — confessed that one third of crop sowing for this year’s wheat output had been misstimed due to flooding.

India, which exports wheat, has bought three times more wheat from the global market this year compared to last year. The situation is no different with corn and barley.

The Korean government has prepared to lower financing costs for raw material purchases, shift to other producers for faster grain supplies and expedite the import process to brace for further spikes in grain prices. But the measures hardly can help address the global crunch.

The government, as well as the transition committee of the incoming government, must come up with more feasible action plans to lessen concerns about food shortages. Food crisis is serious enough to provoke a political uprising.

Korea may not go that far, but people are worried about the surging cost of living. There are many economic issues to be addressed. But stabilizing food prices and supplies should become the top priority.
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