Food Protectionism: Governments Across The World Taking Measures To Protect Food Supplies As Prices Spike

After Russia's invasion of Ukraine roiled commerce and pushed prices of vital necessities skyrocketing, governments throughout the world are making efforts to protect the domestic food supply. Hungary's agricultural minister announced on Friday that grain exports will be prohibited. Argentina and Turkey have also taken steps this week to tighten their grip on domestic products. Moldova, although being a tiny shipper, has temporarily banned wheat, corn, and sugar shipments as of this month.

Protectionist measures, which have grown in popularity in recent years as the Covid-19 pandemic has raised concerns about local shortages and high costs, might herald further bad news for the global food trade. Crop supplies from most of the vital Black Sea region have come to a standstill as a result of the conflict in Ukraine, raising worries of grain and sunflower oil shortages.

According to Abdolreza Abbassian, an independent analyst, this is contributing to rising global food prices, raising the risk of export limits. Harvest delays have compounded the shortage, with global grain stocks forecast to fall for the sixth year in a row.

"It's something to be concerned about because we know it's occurred before," said Abbassian, who has been following agriculture markets for decades. "We're already in the middle of a perfect storm." That one isn't necessary."

Argentina, a major grain exporter, is developing a system to ensure wheat supply for local millers and keep pasta costs in check. Turkey, the world's top flour exporter, increased the agricultural ministry's jurisdiction over a wide variety of exports, allowing it to make "periodical arrangements" if necessary.

Hungary's prohibition is effective immediately, and a government order will be issued soon, according to the country's agricultural minister. So far this season, the nation has exported around 127,000 tonnes of soft wheat.

Bulgaria, a considerably larger exporter, is working on a mechanism to acquire grain that may be used to fulfill the requirements of its people, according to the government, which announced the plan during a meeting with producer lobby groups on Friday.

Although the agricultural minister disputed any export embargo, an organization of grain producers in the nation said shipments are being prevented from departing ports informally. As Ukrainian ports close, customers are flocking to alternate origins.

"While respecting market principles, the state has the levers and methods to prepare for a hypothetical food crisis," the Bulgarian group warned earlier this week.

In other measures, Indonesia, the world's top producer of palm oil, cut shipments in January to boost local supplies. Since last year, Russia has begun taxing grain shipments and issuing sales quotas regularly. Sanctions and the perils of navigating the Black Sea have further hindered the country's trade. It advised fertilizer companies to suspend shipments on Friday.