Trade embargo and inflation raise food prices | News, sports, jobs

Suki Wu, Katong Mei Wei boneless chicken stall owner, stands an infant in his stall in the food court of a shopping mall in Singapore, Malaysia. AP photo en It didn’t taste good – and it wasn’t good. This is because Wu has switched to using frozen chicken after Malaysia limited the export of live chicken and tasty, affordable broiler chicken to offset higher domestic prices. For Singapore, which gets a third of its poultry from Malaysia, the effect was immediate. (AP Photo)


Soki Wu’s food stall, tucked into a food court in a Singapore shopping mall, is a crowd favorite because of its fresh juice. “Rice with chicken,” national dish. But customers recently started complaining that his chicken didn’t taste as good as before.

Wu was forced to switch to frozen chicken after Malaysia last month banned the export of affordable and better-tasting live broiler chicken in a bid to offset higher domestic prices. For Singapore, which gets a third of its poultry from Malaysia, the effect was immediate.

This is inevitable. The use of frozen chicken has affected the taste of the dish, but we have no other choice,” Wu said.

With inflation soaring around the world, politicians are scrambling for ways to keep food affordable as people increasingly protest the rising cost of living. One quick response has been a food export ban to protect domestic prices and supplies, as a growing number of governments in developing countries try to show a nervous public that their needs will be met.

For business owners, the high cost of cooking ingredients – from oil to chicken – has pushed up prices, with people paying 10% to 20% more at a food stall in Wu. For consumers, that has meant paying more for the same or less quality food or curbing certain habits altogether.

In Lebanon, where endemic corruption and political deadlock have crippled the economy, the United Nations World Food Program is increasingly providing people with cash assistance to buy food, especially after a devastating 2020 port explosion destroyed huge grain silos. Constant power outages and high fuel prices for generators limit what people can buy because they cannot rely on freezers and refrigerators to store perishables.

Tracy Saliba, a single mother of two and a Beirut business owner, says she used to spend about a quarter of her earnings on food. These days, half of her income goes to feed her family as the currency loses strength amid rising prices.

“I don’t buy (groceries) like I used to,” Saliba said. “I only get the necessary items and food, like day in and day out.”

Food prices are up about 14% this year in emerging markets and by more than 7% in advanced economies, according to Capital Economics. In countries where people spend at least a third of their income or more on food, a sharp increase in prices can lead to a crisis.

Capital Economics predicts that households in developed markets will spend an additional $7 billion per month on food and beverages this year and much of next year due to inflation.

Pain was felt unevenly, with 2.3 billion people experiencing moderate or severe hunger last year, according to a global report from the World Food Program and four other UN agencies.

Food prices accounted for about 60% of the inflation rise last year in the Middle East and North Africa, excluding the oil-producing Gulf states. The situation is particularly dire for Sudan, where inflation is expected to reach 245% this year, and Iran, where prices of chicken, eggs and milk rose 300% in May, sparking panic and sporadic protests.

In Somalia, where 2.7 million people cannot meet their daily nutritional needs and where children die from malnutrition, sugar is a source of energy. In May, a kilogram (2.2 pounds) of sugar was about 72 cents in the capital, Mogadishu. A month later, its price reached $1.28 per kilogram.

“In my house I serve tea (with sugar) three times a day, but from now on I have to reduce it considerably to make it only when the guests arrive,” said Asli Abdelkader, a Somali housewife and mother of four.

People there are preparing for higher costs after India announced it would limit sugar exports this year. Even if it did not reduce India’s sugar exports compared to previous years, the news of the restriction was enough to spark speculation among traders like Ahmed Farah in Mogadishu.

“The cost of sugar is expected to rise because Somalia relies heavily on white sugar exported from India and some brown sugars from Brazil,” He said.

One of the reasons for the high cost of food is food export restrictions aimed at protecting domestic supplies and putting an end to inflation.

Food prices have been steadily rising worldwide due to drought, supply chain issues, and rising energy and fertilizer costs. The Food and Agriculture Organization of the United Nations says food commodity prices rose by 23% last year.

The Russian war in Ukraine drove up the prices of wheat and cooking oils, leading to a global food crisis. There has been significant progress this week in creating safe lanes for Black Sea shipments, but Ukrainian ports have been banned from exporting these key commodities for several months and it will take time to move them back to vulnerable countries around the world.

There is concern that the impact of all these factors will lead to more countries resorting to food export bans, which is felt globally. When Indonesia banned palm oil exports for a month in April, palm oil prices rose at least 200%.

Analysts say the food export ban is shortsighted because it has a domino effect in driving up prices.

“I would say that roughly 80% of the bans that we see are unwise — some kind of gut reaction by some politicians,” said David Laborde, who is credited with creating the Food Trade Policy Tracker at the International Food Policy Research Institute.

“In a world where you’d be the only one doing that, that could make sense,” He said. “But in a world where other countries can do that as well, that’s far from a good idea.”

Laborde said ban “A very selfish policy…because you are trying to get better by making things worse for others.”

The list of food export restrictions that Laborde has been tracking since the COVID-19 pandemic is long and constantly changing. Examples of its impact include Kazakhstan’s restrictions on grain and oil prices in Uzbekistan, Tajikistan, Turkmenistan, and Afghanistan. Cameroon restrictions on the export of rice in Chad; and Tunisian restrictions on fruits and vegetables on Libya.

In Singapore, 29-year-old Wu hopes to be able to run the family business as the Singapore government has signed on to Indonesia as a new chicken supplier.

“Things will get better,” He said. “(This) will only make us more resilient.”

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Elbatrawy reported from Dubai, United Arab Emirates. Ng from Kuala Lumpur, Malaysia; Chehayeb from Beirut. Farouk from Mogadishu, Somalia.

Copyright 2022 The Associated Press.

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