War in Ukraine: UN urges governments not to impose foodstuff export restrictions

Written by on May 15, 2022 in Europe - Comments Off on War in Ukraine: UN urges governments not to impose foodstuff export restrictions

Against the background of mounting concern about the impact of Russia’s war on Ukraine on the availability of key foodstuffs such as wheat, the UN has called on governments to refrain from imposing export restrictions, which it says could exacerbate food price increases and undermine trust in global markets.

Addressing G7 agriculture ministers, UN Food and Agriculture Organization Qu Dongyu called on G7 nations to help anticipate future food shortages, as the war in Ukraine squeezes supplies, pushes prices to record highs and threatens already vulnerable nations across Africa and Asia.

Russia and Ukraine are important players in global commodity markets, and the uncertainty surrounding the war has caused prices surges, particularly of wheat, maize and oilseeds, as well as fertilisers.

These increases come on top of already high prices driven by robust demand and high input costs as a result of the Covid-19 pandemic, the UN FAO said.

In March, the FAO Food Price Index reached its highest level (160 points) since its inception in 1990 and only dipped slightly in April.

Wheat export forecasts for both Russia and Ukraine have been revised down since the start of the war. And despite other market players such as India and the European Union boosting their offers, supply remains tight and prices will likely remain elevated in the coming months, Qu said.

Countries that are heavily reliant on wheat imports include Egypt and Turkey, but also a number of Sub-Saharan countries such as Congo, Eritrea, Madagascar, Namibia, Somalia and Tanzania. Countries that are heavily dependent on fertilisers imported from Russia include key cereal and high value commodity exporting countries like Argentina, Bangladesh and Brazil, the UNFAO said.

Calling on governments to refrain from imposing export restrictions, Qu said that instead, we must “ensure that any measures taken to address the crisis do not exacerbate food insecurity and on the contrary increase resilience”.

Earlier this week, the European Commission (EC) presented a set of actions to help Ukraine export its agricultural produce, including “Solidarity Lanes” for Ukraine to export grain and import vital goods.

Following Russia’s invasion of Ukraine and its blockade of Ukrainian ports, Ukrainian grain and other agricultural goods can no longer reach their destinations, the EC said.

“The situation is threatening global food security and there is an urgent need to establish alternative logistics routes using all relevant transport modes,” the EC said.

The EC set out an action plan to establish “Solidarity Lanes” to ensure Ukraine can export grain, but also import the goods it needs, from humanitarian aid to animal feed and fertilisers.

European Commissioner for Transport Adina Vălean said: “20 million tonnes of grains have to leave Ukraine in less than three months using the EU infrastructure.

“This is a gigantesque challenge, so it is essential to coordinate and optimise the logistic chains, put in place new routes, and avoid, as much as possible, the bottlenecks,” Vălean said.

The EC said that in spite of immediate efforts by the EU and its member states to ease border crossings between Ukraine and the EU, thousands of wagons and lorries are waiting for clearance on the Ukrainian side.

The average current waiting time for wagons is 16 days, while it is up to 30 days at some borders.

More grain is still stored and held back in Ukrainian silos ready for export.

Among the challenges are differing rail gauge widths: Ukrainian wagons are not compatible with most of the EU rail network, so most goods need to be trans-shipped to lorries or wagons that fit the EU standard gauge. This process is time-consuming and trans-shipment facilities along the borders are scarce.

To address these obstacles and set up the Solidarity Lanes, the Commission, together with member states and stakeholders, will work on several short-term priority actions, the EC said.

The EC called on EU market players to urgently make additional vehicles available. In order to match demand and supply and establish the relevant contacts, the Commission will set up a matchmaking logistics platform and ask member states to designate dedicated Solidarity Lanes contact points (a “one-stop-shop”).

Ukrainian agricultural export shipments should be prioritised, and infrastructure managers should make rail slots available for these exports, the EC said.

The Commission called on market players to urgently transfer mobile grain loaders to the relevant border terminals to speed up trans-shipment.

A road transport agreement with Ukraine will also remove bottlenecks, the Commission said.

To encourage EU transport operators to allow their vehicles to enter Ukraine, the Commission will also investigate options for top-up financial guarantees, it said.

The EC urged national authorities to apply maximum flexibility and to ensure adequate staffing to accelerate procedures at border crossing points.

The Commission said that it would assess available storage capacity in the EU and coordinate with member states to help secure more capacity for temporary storage of Ukrainian exports.

(Photo: Andreas Krappweis/sxc.hu)

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