Already reeling from child hunger and wars in Yemen and across Saharan and central Africa, the developing world is now bracing for the full impact of Russia’s invasion of Ukraine on food supply.
Nearly two months into this European war, aside from the horrific suffering in Ukraine, experts warn that the long-term impact on energy and food prices will affect the world’s most vulnerable people the most.
South Asia is already seeing the economic impact of the Ukraine war turn into full-blown political crises in Sri Lanka and Pakistan. Although Nepal’s debt burden is not as serious as Sri Lanka, the soaring import bill for food and fuel, stagnant exports and the collapse of tourism have depleted the foreign exchange reserves. The only saving grace is that remittance from Nepalis abroad showed a slight increase in February.
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Nepal Oil Corporation raised the price of petroleum products again this week to Rs160/l for petrol and Rs1,600 for an LPG cylinder. This will raise the price of food even more. Nepal Rastra Bank verbally instructed CEOs this week to cut LCs for imports of luxury items and real estate loans. The government is mulling a two-day weekend with 9AM start to weekdays, and cutbacks on the government’s fuel consumption.
Ukraine and Russia collectively supply more than a quarter of the world’s cereals including wheat. Nepal imports grain from India, which has a stock of nearly 100 million tons and has been sending aid to Afghanistan and other countries in the region. In March, its export of wheat rose to 8 million tons. This is expected to push up food prices in India, and by extension in Nepal.
“We have to quickly establish or identify alternative suppliers for the import of basic food items, maintain a minimum of buffer stocks and implement food or cash-based program that supports and protects the poor who may be affected by the price rise,” Bishow Parajuli, the WFP Representative in India, told Nepali Times.
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