Export restrictions on the rise – what are the risks and opportunities?

The war in Ukraine is causing many nations to reassess long-established trading relationships, as geopolitical tensions and ag commodity prices continue to rise while grain and oil shipments out of the Black Sea fall. We’re in a new era where trade patterns realign, and food security concerns grow. In response, some nations are reintroducing export restrictions on foodstuffs and inputs necessary to produce them.

Food inflation and food security

What is driving this increase in export restrictions? The answer is simple: food inflation (Figure 1). During the last two periods when food inflation was this high, we saw political and civil unrest in multiple developing and underdeveloped countries:

• In the 2007-08 food crisis, food inflation was above 20% for 16 months and reached a high of 64% in March 2008. The World Food Program estimates 48 countries experienced food riots during this time.
• In 2010-11, food inflation was above 20% for 12 months and reached a high of 41% in April 2011. High food costs were a key driving force behind the ‘Arab Spring’ movement of 2011.
• Over the past 14 months, food inflation was above 20% and reached a high of 41% in May 2021. It was declining before the war in Ukraine but has been rising again in the last three months... Read More