Extreme weather phenomena increasingly lead to crop failures, such as in , which today is more expensive than ever and for this reason its officials are preparing for a food crisis in a stress test, according to a report by Handelsblatt. Cocoa prices in Frankfurt reach one high record after another and make it more expensive than copper. Furthermore, the price of olive oil (p.r. which is one of the main agricultural products in the EU) has increased so sharply that it is now the most stolen product in Spanish supermarkets. The disease of the “yellow dragon” has decimated the harvest of oranges to such an extent that orange juice on the New York futures stock exchange was at times about twice the price of the previous year. Price increases give a preview of what consumers could expect if the earth continues to warm up. Furthermore, extreme climatic conditions are one of the reasons why the prices of cocoa, olive oil and orange juice have increased. And although the prices of wheat, corn and soy are currently low due to good harvest prospects in South America, the US and Russia, extreme weather conditions have already caused crop failures in some regions of the world. So should EU consumers prepare not only for more expensive chocolate in the coming years, but also for empty shelves in supermarkets? Several EU officials, government members, food safety experts, industry representatives and some journalists prepared for this scenario in a stress test a few weeks ago. At first sight, it is surprising that Brussels views a food crisis as a real threat. With a few exceptions, European countries take the lead in the World Food Safety Index ranking. “Europe is indeed a continent with a very high level of food safety”, stresses Pyotr Magnuzewski (Piotr Magnuszewski), scientific director of the Centre for Systematic Solutions in Wrocław. Pandemics and crises as short-term depolytic agents Food safety expert Chris Hegardon (Chris Hegadorn) believes that food crises in the EU are understood. He got a taste of it when he spent a weekend in Brussels. Farmers had protested three days ago. As a result, Hegardon was unable to find fresh food at the supermarkets on Saturday night. Even at the beginning of the coronaean pandemic, many European consumers were faced with empty shelves in supermarkets. However, pandemics or wars threatening food security are difficult to predict. “We focused on climate change because it is predictable that it has and will have an impact on food cultivation,” Magnuzewski explains. For example, it has been observed that jet current, which carries high and low pressure areas to the northern hemisphere, will slow down in the future. This means that weather periods – such as heavy rainfall or drought – will last longer in the future. According to Magnuzewski, this has serious consequences for agriculture and, combined with other extreme climate-related phenomena, could lead to serious food shortages in various parts of the world. Unstable offer due to extreme weather conditions Agricultural economist and former OECD director Stefan Tangermann believes that an extended food crisis in the EU is unlikely. What is possible, however, is short-term price fluctuations, combined with sharp price increases. This could be caused by political crises, such as Russia’s offensive war against Ukraine, but also by weather disasters. Climate change causes such extreme weather events to increase, such as the current drought in Spain. It is currently causing an increase in olive oil prices. This is because about half the world’s supply of popular cooking oil comes from Spain. “Because of the drought, the harvest fell to half last year”, as the Wall Street Journal reports. Expensive corn in the South African countries Much more dramatic than expensive olive oil, however, are the effects of extreme weather conditions on corn harvesting in Zambia, Botswana and Zimbabwe. According to Bloomberg, the three southern African countries recorded the driest February of the last decades. In Zambia, about 45% of the cultivated land was destroyed and the cost of cereals increased by 76% in February compared to the previous year. In Zimbabwe, prices increased at a similar rate. The country’s government warns that this year’s harvest could only be half of last year. The drought also affects the harvest of maize in South Africa. Modelling the South African Central Bank shows that severe drought conditions could add three to eight percentage points to the core of inflation. However, these crop failures have no extensive local impact. The forward corn contracts negotiated on the Chicago Future Fulfillment Contracts Exchange retreated by more than a third last year. Prices for wheat and soya also decreased by a similar amount. “The weather conditions for agricultural products are currently good,” says Carlos Day (Carlos Mera), an agricultural product analyst at Rabobank. Strong soy crops are expected in South America, the main crop area, and good crops are expected in the US as well. “The same goes for wheat, for which very good harvests are expected in Russia and the US”. The deficit in cocoa has systemic reasons However, the situation is different in South Asia, Australia and India. These countries are affected by the negative effects of El Niño. The weather phenomenon includes unusual ocean currents in the South Pacific, which result in heavy rainfall, but also unusual drought and storms, for example in South America, the Pacific region and Africa. According to Mera, El Niño has an impact on sugar harvest, for example. Long-term drought and heavy rainfall have also seriously affected cocoa cultivation in the two most important producing countries, Côte d’Ivoire and Ghana. However, there are systemic reasons for poor cocoa crops, explains Day. This is due to the fact that Côte d’Ivoire and Ghana set a fixed price received by farmers before each main harvest in October. “This means that they do not benefit from current record prices, so they do not react to the expansion of production”. In any case: “The famines and food crises are currently less related to the climate than to the conflicts,” Mera points out. For example, there is currently a food crisis in Nigeria due to the devaluation of currency and civil unrest. This also results from a report by the Food Safety Information Network: The main reason for famines, for example in Sudan, is military conflicts. However, the report reveals that in some countries, food crises are directly due to extreme weather conditions. India continues alone Prices increases for basic foods are particularly serious – such as rice, which has at times become much more expensive on the Chicago Future Fulfillment Contracts Exchange. Due to bad harvests, India, which is responsible for 40% of world rice supplies, imposed last year restrictions on rice exports. Magnuzewski explains that the EU stress test is designed to prevent such short-sighted reactions. “The point is to be prepared in case of crisis”. Agricultural economist Tangerman points out that: “Slow-term food crises on world markets are often exacerbated by political reactions, such as restrictions or export bans”. In his view, however, there is a way to limit the risk of fluctuations in food prices and supply: The EU could approve gene modification technologies already used in other parts of the world, as in the US. “Genomic scissors, for example, can be used to breed plants that are more resistant to drought or parasites”.
Because ejecting the prices of cocoa, olive oil and orange juice has just begun
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