The executive director of the World Food Program says the global food crisis stands to get even worse in 2023 because of possible reductions in farm production due to shortages of affordable fertilizer.
David Beasley, a former South Carolina governor who has led the WFP since 2017, told the Senate Foreign Relations Committee that 50 million people in 45 countries already face famine this year, threatening the stability of those nations.
“I’m very concerned next year that we may have … a food availability problem, and that is going to be a crisis beyond anything we have seen in our lifetime,” he said.
“Before the war in Ukraine, the country produced enough food to feed 400 million people per year. Food export disruptions had immediate implications for countries that rely heavily on grain imports from both Russia and Ukraine – key players in global wheat and maize markets,” according to the WFP.
The United States has so far struggled to get other nations to provide food aid to meet existing needs, according to Beasley and two administration officials who testified at the hearing, U.S. Agency for International Development Administrator Samantha Power and U.S. Ambassador to the United Nations Linda Thomas-Greenfield.
“This privilege of helping people in their hour of need is being borne very disproportionately by the United States right now,” Power said.
China has given the World Food Program just $3 million for food aid, Beasley said. European countries have put their focus on helping Ukraine and the refugees from there. Middle Eastern countries, meanwhile, are under pressure from the Biden administration to at least help address food needs in Yemen, which would free WFP resources to be used elsewhere.
Beasley said he is also trying to get Japan and South Korea to provide more aid.
Sen. Chris Murphy, D-Conn., said the United Arab Emirates had contributed just $23 million. “I mean, the Emiratis sneeze $23 million every morning they wake up, and yet we can’t get more than $23 million to support humanitarian relief,” he said.
Washington Week Ahead: Vilsack faces senators amid mounting food crisis
Thomas-Greenfield said Russia has slowed the export of its own food while also intimidating African countries that might complain about its actions. “Russian agricultural products are not being blocked. They’re not shipping them out as rapidly as they could for a number of reasons of their own making,” she said.
FERTILISER PRICES had recently fallen from their record highs but remained at levels much higher than before the Ukraine-Russia crisis, said the ICIS fertiliser market editors in this important ICIS podcast (please listen very closely and take note).
A sign, perhaps, of the fertiliser market returning to normal? Far from it, said deputy managing editor Deepika Thapliyal, who covers urea for ICIS. She warned of the potential for major logistics disruptions because of numerous farmers re-entering the market when it was believed that prices had bottomed out.
This could place further strain on already disrupted ports and other supply chains, delaying deliveries of fertilisers for the next planting seasons.
Deepika and Sylvia Traganida, ICIS senior editor covering phosphates, said that the food crisis could get worse in 2023 because of fertiliser shortages, disrupted food supplies, extreme weather events, limited financing and lack of knowledge among farmers about how to switch to different fertilisers.
Before the war, Russia and Belarus supplied 40% of the world’s exports of potash, according to a Morgan Stanley study quoted by CNBC.
Russia also accounted for 11% of global urea exports and 48% of ammonium nitrate exports. Russia and Ukraine together exported 28% of fertilisers made from nitrogen and phosphorous, as well as potassium, said the same Morgan Stanley analysis, again quoted by CNBC.
Russian fertiliser exports have been fit by sanctions, Ukraine production and shipments have obviously been affected by the conflict. Prices have also been driven higher by the surge in natural gas cost, the raw material used to make fertilisers.
Boston Consulting Group (BCG), in a May 2022 article, said:
More than 40% of the world’s caloric intake came from just three crops – wheat, corn and rice. Production of these grains was concentrated in just a few regions, with just a few players dominating each step of the value chain. Russia and Ukraine together accounted for 30% of global wheat exports and provided 12% of the world’s calories.
Some 1.7bn people – most of them in developing economies – could suffer greatly from heightened levels of food insecurity, high energy prices and debt burdens, according to the UN Task Team for the Global Crisis Response Group.
Most residents of countries where food made up less than 10% of consumer spending, such as the US, Australia and the UK, would be modestly impacted by rising food prices.
The impact would be far more severe in the many countries around the world where food comprised over 40% of consumer spending. This included Pakistan, Guatemala, Kenya and Nigeria – and the most vulnerable populations in every country.
The looming global food crisis was not about the world’s ability to produce enough food, but was instead about storage and distribution.
The war had “compounded or accelerated pre-existing food deficits and inflationary trends arising from a host of linked factors: the negative economic impact of the pandemic; resulting supply-chain, employment and transport problems; extreme weather and climate-crisis-related falls in output; spiralling energy costs and numerous other ongoing conflicts worldwide,” wrote the Guardian in another May article.
Middle-income countries, such as Egypt and Brazil, were very poorly positioned to deal with increased food insecurity, said the newspaper, quoting the international risk consultants, Verisk Maplecroft.
Many governments had exhausted their financial and reserves dealing with the coronavirus and had incurred large debts, said the Guardian.
There was an “all-time high of 49m people in 46 countries at risk of succumbing to famine or famine-like conditions,” said the UN’s World Food Programme (WFP) in a report published earlier this month.
“A total of 276m people are facing acute food insecurity in 81 countries with WFP operational presence, and this number could increase to 323m people in 2022 due to the effects of the conflict in Ukraine,” continued the report.
Underlining BCG’s argument that food distribution and storage were the problems rather than food production, Brian Lander, WFP’s Deputy Director of Emergencies, said: “There is absolutely no reason to have people starving to death today. There is enough food in the world to feed everyone, and that is why it is critical to act now to prevent starvation.”
Calculating the impact on HDPE demand
The chemicals and polymers industries are being transformed by the geopolitical conflict between the US and China, the Ukraine-Russia conflict which has made the latter conflict worse – and all the other implications of Ukraine-Russia.
But this is of course a story for the long term, requires many separate blog posts, and is an aside from today’s main theme of food security. Suffice to say, here, though, that I hope one of the long-term outcomes of Ukraine-Russia will be more robust global food-supply chains.
Right now, the biggest priority is avoiding a humanitarian catastrophe resulting from lack of access to food. This blog, though, is about helping chemicals companies plan for a very uncertain future using ICIS data, however trivial this might seem.
Back in March, when I considered linear-low density PE (LLDPE) demand, I had expected the food crisis to result in a decline in developing world demand during 2022.
At that time, it seemed as if the region’s demand would this year contract by around 1% over 2021 compared with the ICIS base case for 5% growth.
But food-price inflation appears to have yet to significantly hurt vulnerable economies. Emergence from the worst phase of the pandemic is instead supporting demand.
India, thanks to its as usual vibrant middle class, is expected to see the fastest growth amongst the major economies.
India’s growth is being boosted by stronger exports and record profits among publicly traded companies, even though job creation remains anaemic, according to this 13 June article from the New York Times.
“We are also seeing a great deal ‘revenge spending” as people compensate for consumption during the lockdowns,” said an Indian polymer industry source.
Southeast Asia appears to be in the middle of a reasonably strong recover. The commodity-exporting economies of Malaysia, Indonesia and the Philippines benefiting from high commodity prices. Thailand’s economy is recovering because of the rebound in tourism.
But labour shortages and depreciating currencies are significant negatives across the region.
What of next year, though given the warning from our fertiliser team about potential shortages of fertilisers for the forthcoming planting season, the likely further disruptions in food exports and the increasing strain on developing-world finances?
It is prudent to consider downsides for 2023 polymers demand. In the developing, even demand for the most basic of modern-day goods, including food packaging, can be damaged by increases in extreme poverty.
On this occasion, I examine high-density polyethylene (HDPE) demand. The chart below shows expected developing world demand in 2022 with two outcomes for 2023. One is our base and the other my downside.
Note that China is not included as China is no longer a typical developing economy.
The ICIS base case for 2023 assumes the strong growth momentum from this year carries on with no negative impact from the food crisis.
My downside is very much for demonstration purposes only. I have assumed that the percentage demand declines for South and Central America, the Middle East, Africa and developing Asia that we saw in 2020 – at the height of the pandemic – are repeated in 2023.
The effects would be big. Instead of developing world demand in 2023 growing by around 800,000 tonnes, it would contract by 300,000 tonnes. Assuming all the other regions grew as under our base case, global growth would be 2% in 2023 rather than our base case of 4%.
Under our 2023 base case, developing world demand is forecast to comprise 30% of global demand. Growth of consumption across the region is expected to account for 42% of the global total, in second place behind China at 44%.
Conclusion: why more complex demand management is needed
It used to be possible to estimate developing world demand through multiples over GDP growth. One could argue about the size of the multiples, but, in general, growth was nearly always rapid and the region as a whole tended to move together.
Not now, as the above analysis demonstrates. Some countries with poor financing, a lack of commodity exports and a large proportion of their populations close to the extreme poverty line could be badly affected by the food crisis.
And as we have discussed, even middle-income countries such as Brazil and Egypt face significant risks. But perhaps countries such as Malaysia and Indonesia will be okay next year because they are major commodity exporters.
We should worry, though, about some countries in Africa where food security is already weak because of climate change and conflict.
What is therefore needed is country-by-country assessments of outcomes for chemicals and polymers demand in 2023, using our ICIS Supply & Demand Database and with the support of our analysts and consultants.
This granular analysis will help you better allocate sales and production. The right decisions on sales and production will, I believe, define success or failure during the multiple crises confronting our industry.
Carnivore’s Bible (is a wellknown meat processor providing custom meat processing services locally andacross the state of Montana and more. Whether your needs are for domestic meator wild game meat processing)
The Lost Book of Remedies PDF ( contains a series of medicinal andherbal recipes to make home made remedies from medicinal plants and herbs.Chromic diseases and maladies can be overcome by taking the remediesoutlined in this book. The writer claims that his grandfather was taughtherbalism and healing whilst in active service during world war twoand that he has treated many soldiers with his home made cures. )
The Lost Ways (Learn the long forgotten secrets that helped our forefathers survive famines,wars,economic crisis and anything else life threw at them)
LOST WAYS 2 ( Wordof the day: Prepare! And do it the old fashion way, like our fore-fathers did it and succeed longbefore us,because what lies ahead of us will require all the help we can get. Watch this video and learn the 3 skills that ensured our ancestors survival in hard times offamine and war.)