A ‘recipe’ for the perfect Storm

PETALING JAYA: It’s the perfect Storm – climate change, war, the Pandemic and its spillover effects have all led to spikes in food prices for Malaysians.

The Russian Invasion of Ukraine, now in its third month, has led to a shortage of wheat and oil.

The Pandemic has not only affected food production, but disrupted supply chains. Extreme weather events have seen either droughts or flash floods hit agricultural land.

While Malaysia has removed the Approved Permit (AP) requirement for importing food, economists warn that the wheat shortage may last as long as the Russia-Ukraine conflict goes on.

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But even when that ends, there are bigger concerns.

According to the United Nations World Food Program, food system disruptions can be linked to climate change and globalization, as well as conflict and strife.

The climate crisis, it said, is one of the main drivers of hunger today.

“Every inhabited region of the world is experiencing the effects of climate change. Over the past decade, 1.7 billion people have been affected by extreme weather and climate-related disasters.

“Communities that contribute the least to the climate crisis are bearing the brunt of its impacts, with limited means to cope,” it said in a recent statement.

ALSO READ: The climate crisis turns up the heat on Malaysia’s food security

Five days ago, India banned wheat exports effective immediately, citing a risk to its food security, partly due to the war in Ukraine.

At the same time, a scorching heatwave affected its output and domestic prices hit a record high.

China’s Agriculture Minister Tang Renjian also reported last warned last month that the country’s winter wheat harvest would be hit after wheat growing regions were hit by major floods.

Back home, Malaysia lost RM90.6mil in agricultural products during the Massive floods that hit the Klang Valley and several other states in December last year.

Federation of Malaysian Breeders Associations Adviser Datuk Jeffrey Ng had said that the hot weather and insufficient workers had affected the supply of chicken in the country, leading to underweight Birds being sold.

Consumers’ Association of Penang education Officer NV Subbarow said many factors have been driving food inflation, including the climate crisis.

With supply shortages expected even more Frequently in the future, Subbarow said Malaysians must be prepared to turn to alternatives.

This includes preparing meals using different ingredients and protein sources from what they normally would.

“For example, if chicken is too expensive, buy fish. If the fish you usually eat is too expensive, try a chaper variety.

“There are also other sources of protein available such as duck and even plant-based Proteins such as Millet,” they said, adding that suppliers will not reduce prices during shortages if demand remains high.

However, Malaysia University of Science and Technology Economics lecturer, Prof Dr Geoffrey Williams warned that the structural impact of Covid-19 lockdowns worldwide has destroyed the food cycle.

The lockdowns stopped planting, growing and harvesting activities and shut down processing plants while also disrupting the supply chain and logistics systems.

“We still have not recovered from that. The conflict between Ukraine and Russia has damaged the supply of grain from both countries and they are stockpiling rather than transporting it.

“The long-term restrictions on the world food supply and transportation in favor of Western suppliers, particularly in the European Union (EU), have been damaging the world food industry for decades,” he said yesterday.

All countries, they said, produce much more food than is required by the global population but due to policy restrictions, many people in need do not have access to it.

ALSO READ: Global chain reaction to food security

Prof Williams said the shortages, including of wheat, would last as long as there are supply restrictions from Russia and Ukraine and stockpiled food in the EU and the United States.

“Both Russia and Ukraine have enough stocks but transportation and logistics are down, and economic sanctions against Russia have stopped their exports.

“The conflict also harms planting and harvesting schedules in Ukraine, so this damages the production pipeline and will cause higher futures prices,” he added.

They said other countries might stimulate production, but it would depend on the planting and harvesting cycle. For example, they said the EU and the United States have significant capacity and stocks.

“They can increase supply from stocks immediately and raise production and exports within the year from lifting quotas and subsidies.

“The only real problem they face is a Labor shortage for harvesting caused by the residual travel restrictions due to the lockdowns.

“If they address these issues, the supply shock can be limited,” they said, adding that leaders must learn the lesson of the devastating impact of lockdowns.

Calling for the liberalization of the food market as the way forward, they said Malaysia should have a complete reform of food supply and implement food security policies.

Among the issues to address are the dependence on imports, lack of competition in domestic supply and efficiency in the industry to reduce Reliance on low-paid work.

“Malaysia cannot continue to be dependent on world markets and must create an independent food supply policy based on agricultural best practices and sound environmental, social, governance and sustainability principles,” he added.

Russia’s Invasion of Ukraine has led to a shortage of wheat globally, as Ukraine is one of the world’s largest exporters of corn, wheat and sunflower oil.

Russia, Meanwhile, is the world’s largest exporter of wheat, providing more than 17% of all wheat sold across its borders.

Khazanah Research Institute Deputy Director Dr Sarena Che Omar said it remains a “guessing game” on how long the wheat shortage would last amid the ongoing war.

“So long as the Ukraine-Russia conflict and other risk factors persist, the shortage or price inflation may persist,” she said.

Sarena got there to be a healthy balance between imports and domestic production.

“I do not condone going 100% self-sufficient for every food item on our menu at all costs,” she said, adding that food security is not just measured by how much we import.

As Malaysia is not ready to be self-sufficient in everything, she said there were potential industries where we have a competitive advantage that should be developed. ”Areas such as artisanal rice from Sabah and Sarawak, Ulam production, Tropical fruits, aquaculture and poultry are some areas worth considering for the domestic industry and also for their export potential, ”she said.

Sarena added that the Covid-19 Pandemic had taught us how intimately linked we all are globally.

“It also shows how global consumerism is so mainstream, and this Pandemic has emphasized the value of appreciating local produce, especially those that grow naturally in our environment,” she said.

“Why buy expensive, imported salads when we may still attain good health and environmental scores by Purchasing local Ulam?”

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