Export Restrictions In Ukraine War Is Posing Serious Problem Now
- Business
Niccolo Romano- 0
- 6 minutes read
The Ukraine conflict has created a global humanitarian and economic calamity that ranges from human suffering, increase in the price of global foods, loss of lives, shortage of foods, and insecurity of food primarily in poor nations. This war is occurring at a time when this world has barely recovered from the Covid-19 impact, which also hampered the global economy. Looking that nearly 30 nations have curtailed exports of goods that include fuel and food since the starting of the Ukraine war, the IMF on Thursday said it is concerned regarding the export restrictions in Ukraine war on food and fertilizers.
The shortage of food is predominantly impacting nations that are dependent on Russia and Ukraine for the imports of basic food staples along with fertilizers. Some members of the WTO (World Trade Organization) who are the important exporters of staple fertilizers and foods have levied export restrictions in Ukraine war, because of the prevailing market uncertainties that are triggered by the war.
Export Restrictions In Ukraine War: The Scenario
The World Trade Organization enables countries to impose export restrictions as a temporary action under various scenarios. These are two opposing arguments in the export restriction in Ukraine war of the WTO.
The table above shows that both Ukraine and Russia are among the top 5 exporters of cereals across the globe. The combined supply of these two nations is close to 16% of cereals. Both these nations have imposed restrictions and also export bans on agricultural supplies. Ukraine has imposed restrictions on the export of sunflower oil, oats, and wheat in a try to safeguard its war affected economy. Russia on the other hand has banned the export of fertilizers, grains, and sugar to other countries.
As the crisis in Ukraine and Russia prevails, World Trade Organization notices on the export restrictions in Ukraine war reveal a rise in the number of nations that have imposed restrictions on imports on a number of cereals. As per WTO, in March 2022, 12 members imposed restrictions on exports of food supplies. These members constitute less than 10% of WTO members. The lately imposed export restrictions are a way of desperation by governments to save food and other important commodities for their countries as they are confronted with shortages of supplies and increasing prices.
Export Restrictions In Ukraine War: IMF’s Take On This
The International Monetary Fund (IMF) welcomed the decision of India recently to relax its originally declared ban on wheat exports and enable some shipments to proceed. IMF spokesperson Gerry Rice said to reporters at a news conference that,
"We are very concerned by the use of food and fertilizer export restrictions, which can exacerbate global price increases and market volatility. So, this goes beyond India."
"Our monitoring indicates that some 30 countries, in fact, have curtailed exports of commodity goods, including food and fuel, and that since the war in Ukraine began. So, we are very concerned about this.”
Kristalina Georgieva (IMF Managing Director) has been very vocal on this matter. Gita Gopinath (First Deputy Managing Director) spoke regarding this again, he said responding to a question on India. Rice said,
"On India, we welcome India's decision recently to relax its originally announced ban and allow some wheat exports to proceed, including the already contracted shipments and exports to countries with food security needs. And we hope to see further relaxation of bans again, not just by India, but also by all countries who have imposed them."
Conclusion
As the invasion of Russia on Ukraine still continues, the ripple impact of this war prevails to create human suffering, damage to global trade, loss of lives, and many more. This export restriction in Ukraine war has already started to pose some serious issues across the globe as they happen to be among the top 5 exporters of cereals in this world.
