WTO chief urges countries not to block exports of basic foodstuffs

DAVOS • World Trade Organisation (WTO) chief Ngozi Okonjo-Iweala has urged countries not to block or restrict exports of basic foodstuffs after Russia's invasion of Ukraine worsened tensions on global food markets.

"We're trying to tell members also on the export prohibition, restriction side, let's keep it down," Mrs Okonjo-Iweala told reporters at the World Economic Forum in Davos, Switzerland on Wednesday. "We don't want this to exacerbate and lead to price spikes."

Her comments followed India's decision the same day to cap sugar exports at 10 million tonnes in the year to September, following up on a ban on wheat sales abroad.

Moscow's invasion has disrupted supplies of fertiliser, wheat and other commodities from both Russia and Ukraine.

In response, "we have about 22 countries now with 41 export restrictions or prohibitions on food", Mrs Okonjo-Iweala said.

As well as foodstuffs themselves, "let's not forget inputs, seeds and fertiliser," she added. She highlighted that the WTO hoped its public monitoring of such controls would deter member countries.

"Transparency helps," Mrs Okonjo-Iweala said. "It helps to put pressure on members or countries that are doing this.

"For security reasons, you can do this for periods of time but it has to be temporary, transparent and proportionate, so they know it cannot go on for ever."

She also said that United Nations Secretary-General Antonio Guterres "is involved" in talks to open corridors through the Black Sea for Ukrainian food exports to reach world markets.

"I know that some work is going on behind (the scenes) to try and see if we can get a solution on that," Mrs Okonjo-Iweala added.

Said McKinsey analyst Clarisse Magnin-Mallez: "There's going to be huge pressure to make (corridors) happen."

There is "no option apart from transporting by sea" because of the "massive volumes" that must be shifted, she added.

Ukrainian Foreign Minister Dmytro Kuleba had earlier on Wednesday said that a Russian proposal to lift the sanctions against Moscow so as to avoid a global food crisis was "blackmail".

Meanwhile, with the world's food problem already severe, there is a good chance governments can stop it from getting way worse by heeding a lesson from the 2008 crisis: don't panic, said Emeritus Professor Peter Timmer at Harvard University who has studied food security for decades.

With a gauge of global prices already at a record following Russia's invasion of Ukraine, a spate of nations have moved to curb exports.

Bad weather is a concern, too.

Still, while wheat, corn and soy have soared, rice, a staple for more than 3 billion people, has so far been more stable.

If nations do not panic or start hoarding, they can stop the current crisis from becoming a rerun of the one in 2008, when rice prices soared , according to Prof Timmer.

"The 2008 lesson is: Do not spook the market," he said. He has worked with Asian governments on their policy responses during that food crisis.

"Be careful whatever you do on rice imports, on exports, on controls," he said.

Rice - about 90 per cent of which is produced and consumed in Asia - is one of the most important crops.

Rice's surge in 2008 was mainly because of bans on exports by major producers due to domestic shortages and rising prices.

That sparked panic buying in other countries, creating a ripple effect. There are some similarities today.

But today, many countries have both diversified their eating habits and built up huge buffer stockpiles in a bid to prevent price shocks. Consumers in India, China and South-east Asia can switch relatively easily from wheat to rice - such as in noodles and cakes - saving the market about 30 million to 40 million tonnes of wheat, Mr Timmer said.

"You could take the heat off the wheat market, you put a little bit of heat on the rice market," he said. While that might cause rice prices to climb by 10 per cent or even 20 per cent, "that is not a rice crisis. That's the rice market adapting to a reality that everyone is going to have to live with for a year or two", he said.

AGENCE FRANCE-PRESSE,BLOOMBERG