Implications of Ukraine Conflict on Food Access and Availability in the East Africa Region, Update #3, June 2022

Highlights

Reduced agricultural production and blockades in the Black Sea Region coupled with trade restriction policies affecting flows of essential goods such as grains and sunflower-seed oil, led to a reduced availability of staples and a sharp increase in global grain prices in May 2022 of 48.6 percent for wheat, 28.7 percent for maize and 9.3 percent for rice, as compared to pre-war January 2022 prices with implications on local market prices across East Africa. • As of May 2022, commodities recording the highest year-on-year (y-o-y) increase are vegetable oils (up 45.9 percent compared to April 2021), cereals (up 36.6 percent), and beans (up 14.1 percent).

The rise in fuel and food prices pushed up inflation rate across East Africa countries, implying households – especially the poorest ones – have less resources to spend on essential food and non-food needs. In May 2022, headline inflation stood at over 37 percent in Ethiopia (from 34.5 in January 2022); at 10.5 percent in Rwanda (from 1.3 percent in the same period) and at 6.3 percent in Uganda (from 2.7 percent in January 2022).

In May 2022, the average monthly price of the local food basket reached USD 17 per capita across the Eastern African countries – representing an increase of 51.1 percent from the same period last year (USD 12.2) and 18.4 percent from pre-war prices (USD 15.1 in January 2022). South Sudan, Somalia and Rwanda recording the highest percentage increase between January and May 2022.

A correlation can be noted between international crude oil and global food prices. The results indicate the spill over of crude oil prices into essential food products. When the prices of crude oil peaked in March 2022, also the global prices of food, particularly vegetable oil and cereals registered a record high during the same period. The higher cost of energy most likely raised the cost of food production and agricultural activity (manufacturing, processing, packaging) and transportation in the short term.

Global fertilizer prices have risen by nearly 30 percent since the start of 2022 because of surging input costs; supply disruptions caused by sanctions (Belarus and Russia), and export restrictions. As a result, the share of fertilizers imported into the region reduced, which also coincided with the peak March- April-May main planting season. WFP estimates that cereal production during the 2022 cropping year could potentially decrease by 16 percent (y-o-y) because high fertilizer and fuel prices. The RAM teams are currently expanding the analysis of the impacts of reduced fertilizer imports on the region over the longer term. As of June 2002, countries seeing the sharpest reduction in fertilizer imports were Ethiopia, Rwanda, and Kenya.

Source: World Food Programme