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Poster in Oct 29, 2022 21:46:39

World Bank report: Food security may face challenges

World Bank report: Food security may face challenges

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Developing countries are in trouble due to the increase in the price of goods in the international market. In this regard, the World Bank has said Bangladesh as an example, due to the increase in the price of LNG in the European market, Bangladesh is in trouble. Power generation in Bangladesh is being disrupted. Extensive load shedding has to be done for this. Because Bangladesh is not able to buy this fuel from the spot market due to the increase in the price of LNG. Pakistan's situation is similar to that of Bangladesh.

Last Wednesday (October 26, 2022), the World Bank published its latest Commodity Market Outlook. There, this example of Bangladesh is highlighted to explain the effect of the increase in the price of goods in the world market.

According to the World Bank report, various risks have been created around the world due to the increase in the prices of essential products. Due to supply disruptions, there has been volatility in the fuel market. This may cause a crisis in Europe next winter. The World Bank also believes that if the price of energy products increases more than expected, it may pose a challenge to food security. On the other hand, there is also a risk of a decrease in the global average growth, said the organization.


According to the World Bank, the prices of food products and fuel oil are increasing in developing countries due to devaluation of their respective countries' currencies. Many countries are already in trouble with this. Ever since Russia's invasion of Ukraine in February, the world has been concerned. Brent crude oil prices fell 9 percent. However, due to the devaluation of local currencies, around 60 percent of oil importing developing countries have increased the price of fuel oil in the local market.

In South Asia, the report said, rising oil prices are disrupting agricultural production, which is driving up food prices. In the three quarters of this year, the price inflation of food products in South Asia has been more than 20 percent. This has also affected other parts of the world. In Latin America, the Caribbean, North America, the Middle East, Sub-Saharan Africa, Eastern Europe, food inflation rates range from 12 to 15 percent. The World Bank says rising commodity prices next year will prolong inflationary pressures.

World Bank Vice President Pablo Sabedra said the prices of many daily commodities are currently at their highest levels. This price is much higher than the average price of the last few years. In this situation, if the price of food products increases again, then the food security of developing countries may face a challenge. For this, it is necessary to quickly adopt necessary policies in various sectors including supply system, distribution, increasing income.

According to the World Bank report, the market of energy products started to become unstable after the Russia-Ukraine war. Now different countries of the world are waiting for the reduction in the price of energy products. The World Bank predicts that the price of energy products will decrease slightly in the coming year after increasing by almost 60 percent in 2022. According to the World Bank forecast, the price of energy products will decrease by 11 percent in 2023. Even if the price drops to the mid-point, it will still be 75 percent above the average price of the last 5 years. The World Bank also says that the average price of Brent crude oil in 2023 could be $92 per barrel. The average price of Brent crude oil for the last five years was $60 per barrel. Natural gas and coal prices hit record highs in 2022. These two products may get some relief in the coming year. Still, Australian coal and US natural gas prices will be double their five-year average.

According to the World Bank, prices of agricultural products may fall by 5 percent in 2023. In the last three quarters of this year, the price of wheat has decreased by 20 percent. However, it is 24 percent higher than the price a year ago. The World Bank has predicted several reasons behind the decline in prices of agricultural products in 2023. These are the increase in wheat production, stability in the supply system in the rice market, resumption of export of agricultural products from Ukraine, etc.

Source:
Online/SZK

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