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Pacific braces for more food, fuel price increases

The price of food and fuel will continue to increase in the Pacific, according to the University of the South Pacific’s economist Dr Neelesh Gounder.

The conflict in Ukraine has impacted Pacific nations’ economies, and despite Ukraine, Russia and the United Nations agreeing to a deal on the shipment of grains, domestic food prices will not see any significant improvement in the short term.

Two ships laden with grains and vegetable oil are scheduled to dock in Turkey while a few more ships are headed for Italy and China.

The ships carrying agricultural cargo held up by the war in Ukraine received authorisation on Sunday to leave the country’s Black Sea coast.

The loaded vessels were cleared to depart from Chornomorsk and Odesa to get some 20 million tons of grains out of Ukraine to Africa, the Middle East and parts of Asia and the Pacific.

Dr Gounder said this was a positive sign for the global wheat and grain market.

“Ukraine contributes to around 10 per cent of the international trade in wheat. While the shipments are important in helping to relieve global supply constraints, it is not expected to have a significant impact on the global price of corn, wheat and soybeans in the next few weeks,” he said.

One of the grain ships enroute to Lebanon. The price of food and fuel will continue to increase in the Pacific, according to the University of the South Pacific’s economist Dr Neelesh Gounder. Picture – UNOCHA

“Other major players include Canada and the United States where production has been impacted by drought and prices remain high.

“Moreover, fertilizer prices have also contributed to higher prices.”

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According to the World Bank, prices of fertilisers have risen 30 per cent since the beginning of this year and have been triggered by surging input costs, supply disruptions caused by sanctions and export restrictions.

The trade deal is set to last for 120 days and can be renewed on agreement.

A joint inspection team from Russia, Ukraine, Turkey and the United Nations. The price of food and fuel will continue to increase in the Pacific. Picture – UNOCHA Twitter

The European Union’s ambassador to the Pacific, Sujiro Seam has told The Pacific Advocate that a study was being done with the United Nations Food and Agricultural Program to find the extent of the impact on Pacific island nations.

The first shipment of over 26,000 tons of Ukranian food under a Black Sea export deal has been cleared to proceed towards its final destination in Lebanon. Picture – UNOCHA Levent Kulu

He said if a humanitarian crisis existed, the EU would definitely help. He has also stated that it was wrong to assume that inflation was a result of the sanctions placed on Russia.

1 Comment
  1. Nazia 4 months ago
    Reply

    Please do something about the fuel price.

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