Non-oil-exporting Mideast countries prompted to seek solutions to contain surging food prices amid Russia-Ukraine conflict

CAIRO, March 22 (Xinhua) -- Policymakers in some non-oil-exporting Middle East countries are racing to bring down surging food costs after their primary food supply chain was disrupted by the Russia-Ukraine conflict, which has exacerbated staple food inflation that had already been steadily rising even before the crisis.

Policies including diversifying food imports, increasing food subsidies and lowering food taxes have been pursued by these countries, which rely heavily on wheat imports from Russia and Ukraine and have limited financial resources to respond to rising food costs.

Some countries have also moved to shore up their food stocks and seek policy adjustments to cut their heavy reliance on food imports, as food security is vital to maintaining social stability in the volatile Middle East.

SURGING FOOD PRICES

Over the past few weeks, several Middle East countries have seen cereal, oil and meat prices climb, especially countries highly dependent on imports from Ukraine and Russia, which are still fighting and engaging in tough negotiations.

Turkey now pays 346 U.S. dollars for importing a ton of wheat, up from 297 dollars in 2021 after the country's supply chain was affected by the COVID-19 outbreak and 230 dollars in 2020, according to statistics published by Turkish media.

In Egypt, the world's largest wheat importer, the market price of a ton of flour increased to 11,000 Egyptian pounds (nearly 700 dollars) in March, up from 9,000 pounds a month earlier, said Attia Hammad, head of the Bakeries division at the Cairo Chamber of Commerce.

In Palestine, the costs of flour, vegetables, chicken and sugar have risen significantly.

"The Russia-Ukraine conflict will have an impact on the global grain market, because Russia and Ukraine account for about 30 percent of global grain exports," said Waleed Gaballah, a professor of financial and economic jurisdictions at Cairo University.

The impact on the Middle East food market is particularly noticeable in nations that rely largely on Russia and Ukraine for imports. In Istanbul, Turkey's largest city, the price for a bottle of 5-liter cooking oil has increased by 35 percent in three days to 200 Turkish liras (nearly 14 dollars) on March 7. With a 64 percent self-sufficiency rate in sunflower oil, Turkey meets the rest of its cooking oil need by imports, largely from Russia and Ukraine.

Consumers in Turkey have flocked to grocery stores and supermarkets to empty shelves, due to the rising price of cooking oil and a fear of scarcity.

FOOD SHORTAGE COMPOUNDED

In economically challenged countries like Lebanon and Yemen, higher costs will make staple food less accessible to the most needy.

The ongoing Russia-Ukraine conflict will further complicate Lebanon's food supply chain, as the country has already been suffering from a financial crisis and a severe shortage of foreign currency needed to import basic items and food products, said Ahmad Hoteit, a representative of Lebanon's wheat importers.

"Lebanon may face wheat shortage in the future," he warned.

In Yemen, rising food costs, compounded by the conflict, may exacerbate the country's humanitarian crisis, according to the World Food Program (WFP).

Imports from Ukraine have accounted for 31 percent of the wheat arriving in Yemen in the past three months, with prices seven times higher than in 2015, raising the cost of WFP operations in the country to 10 million dollars per month.

The WFP has been forced to cut rations in order to feed the people in the greatest need, it said in a statement on March 14.

The Russia-Ukraine conflict "is dealing a further blow to Yemen, driving food and fuel prices further up," according to the statement, and "the country -- already beset by years of conflict, the effects of climate change and the coronavirus pandemic -- depends almost entirely on food imports."

Russia and Ukraine are the two major sources of wheat imports for the Middle East. Egypt and Tunisia, for instance, import 80 percent and half respectively of their wheat from the two countries.

TAX CUTS, SUBSIDIES, POLICY REFORMS

Cristian-Dan Tataru, a guest analyst for the Washington-based Middle East Institute, believed that food prices have reached levels comparable to those before the 2011 political turmoil in the Arab world.

Some countries have enacted policies to tame the rising costs.

Turkey has cut the value-added tax on basic food products from 8 percent to 1 percent.

Israel last month announced a 4-billion-shekel (about 1.25 billion dollars) plan to offset the impact of recent price spikes in basic goods including food items.

Egypt, in an attempt to hold up food reserves, has encouraged farmers to increase wheat deliveries to the government by raising this year's procurement price and starting the wheat supply season earlier than usual.

Furthermore, the country has restricted the export of wheat, fava beans, lentils, pasta and all types of flour for the next three months in order to deliver essential food supplies to millions of Egyptians at below-market costs through its subsidy rationing system.

More importantly, analysts say, some countries have begun to make significant policy reforms to address the fundamental issues of their farm sectors, as tax cuts and subsidies are simply short-term solutions.

Egypt, for example, has announced that it is diversifying its sources of wheat imports from several countries, including the United States, Argentina, Canada and Paraguay, and has attached greater importance to agricultural programs, stimulating farmers to expand their cultivated land and promoting efficient practices to boost domestic food production.