No quick fixes for Arab countries as high grain prices pile on the fiscal pressure

Special No quick fixes for Arab countries as high grain prices pile on the fiscal pressure
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Russia’s withdrawal from the Black Sea Grain Initiative in July has led to fears of wheat shortages on the global market, causing prices for food staples like bread to skyrocket in import-reliant countries like Syria. (AFP)
Special No quick fixes for Arab countries as high grain prices pile on the fiscal pressure
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A combine loads grain onto a truck during a wheat harvest at a field near Kivshovata village, Kyiv region, UKraine. (AFP)
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Updated 11 October 2023
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No quick fixes for Arab countries as high grain prices pile on the fiscal pressure

No quick fixes for Arab countries as high grain prices pile on the fiscal pressure
  • Import-reliant region has felt the pinch since Russia withdrew from the Black Sea grain deal and India banned rice exports
  • Governments urged to boost food system resilience by diversifying import sources, increasing domestic production

TUNIS: As the Israel-Palestine conflict once again flares up, threatening to plunge the Middle East into a new crisis, it does not mean that the other serious problems plaguing the wider region are petering out. If anything, they are likely to grow worse.

Many low- and middle-income Arab economies have been facing deteriorating food security conditions in recent months, after Russia withdrew from the Black Sea Grain Initiative and India banned the export of white rice and sugar. Among the most vulnerable countries are Tunisia, Libya, Lebanon, Iraq and Egypt, to say nothing of conflict-torn Syria, Sudan and Yemen.

Russia’s exit in July from the deal announced 12 months earlier has disrupted global grain supplies in general and wheat markets in particular. At the same time, global rice prices have skyrocketed since India’s decision, also in July, to halt exports of non-basmati varieties.

Egypt and Lebanon, heavily reliant on imported rice and wheat, are now grappling with food-financing challenges, while Sudan, which was already battling hunger and civil conflict, is in no position to import costly foodstuffs.




There has been a decline in Ukrainian grain exports since the deal was signed in 2022. (AFP)

In the face of these challenges, many are asking what food-insecure Arab countries ought to be doing to insulate themselves against the effects of future supply-chain shocks, to help keep prices affordable for their populations, and potentially localize a bigger slice of their food production.

“By reducing reliance on a single source, these nations can mitigate the risks of abrupt disruptions, similar to those witnessed in the Ukraine-Russia conflict,” Adam Vinaman Yao, deputy representative of the UN’s Food and Agriculture Organization in Sudan, told Arab News

Prior to the conflict, which began in February, 2022, Russia and Ukraine were jointly responsible for almost a third of the world’s wheat and barley production. Russia’s invasion resulted in the blockade of Black Sea ports, however, raising fears of imminent shortages on the world market that would potentially hit import-reliant developing nations the hardest.

The Black Sea Grain Initiative, brokered by the UN and Turkiye in July 2022, played a pivotal role in facilitating the continued export of millions of tons of grain from Ukraine to global markets despite the conflict, via the Bosphorus Strait. Approximately a third of the grain that traversed the Black Sea under the deal was destined for Egypt, Libya, Israel, Tunisia, Algeria, Turkiye and Iran.

The deal therefore offered some respite. However, just a year after it came into effect, Russia abruptly announced it was withdrawing from the agreement.

Lebanon, which has been in the throes of a crippling economic crisis since 2019, and Yemen, which has been brought to the brink of famine as a result of a nine-year civil war, were especially vulnerable to the disruption.

The UN World Food Program, which provides a lifeline for millions of people caught up in humanitarian disasters worldwide, particularly in the drought-stricken Horn of Africa, was also significantly affected by the collapse of the grain deal.




A deadly feud between two military leaders in Sudan that has been raging since April 15 has compounded the woes of a population ravaged by hunger and malnutrition. (Reuters)

As of July this year, about 80 percent of the WFP’s grain stock originated in Ukraine, up from about 50 percent before the war.

The Middle East and North Africa region, much of which was already reeling from soaring public debt, high inflation and steady currency depreciation, now faces the additional threat of soaring food prices. The collapse of the grain deal merely intensified the supply challenges and price pressures such nations were already confronting.

Countries such as Lebanon, Egypt, Syria and Iran, which have experienced sharp currency devaluations leading to triple-digit food-price inflation, are now at even greater risk. In fact, the number of food-insecure people across the MENA region has surged by 20 percent in the past three years as a result of conflicts and climate-related challenges, such as drought.

Egypt, projected to be the world’s leading wheat importer in 2023-24, expressed strong disapproval of Russia’s decision to withdraw from the grain deal. Egyptian authorities heavily subsidize the price of bread, and so the country is highly susceptible to food-price fluctuations.

Egyptian President Abdel Fattah El-Sisi’s decision to personally attend the Russia-Africa Summit in St. Petersburg in July gave some indication of how seriously his government is taking the issue of the grain deal.

“Collaborations between Ukraine and Egypt for direct corn supply are on the horizon, as Ukrainian corn holds a unique position in the market, being geographically closer than alternatives in Brazil and Argentina,” Pavlo Martyshev, a Kyiv School of Economics expert in food markets, told Arab News.




Many low- and middle-income Arab economies have been facing worsening food security conditions in recent months. (AFP)

The collapse of the deal was not solely the result of geopolitical maneuverings. Russia claimed that certain aspects of the agreement, particularly those relating to its own food exports, had not been implemented, and that Western sanctions were indirectly affecting its grain exports.

Moscow’s demands for its agreement to resume the deal, including the readmission of the Russian Agricultural Bank to the SWIFT international payments system and the resumption of exports of agricultural machinery, have thrown up further roadblocks.

However, Moscow’s claim that Russian farmers have had a raw deal compared with their Ukranian counterparts does not stand up to scrutiny.

Figures from the UN’s Black Sea Grain Initiative Joint Coordination Center, which facilitated the implementation of the agreement, reveal a decline in Ukrainian grain exports since the deal was signed in 2022, and particularly during May and June this year. Ukrainian production also suffered a significant blow as a result of the war, decreasing by between 35 and 40 percent.

In contrast, Russian wheat exports surged to historic highs in 2022 and 2023, thanks to a record harvest and substantial wheat stocks. However, this abundance did not ease the pressure on those nations dependent on the import of Black Sea grain.

FASTFACTS

• 783m People across the world who do not have enough food.

• 60% Cut in World Food Programme food aid recipients since June due to funding shortfalls.

• 60% World’s hungry living in zones affected by conflict.

• 8o% Hunger crises of which conflict is the main driver.

Russia has given the UN three months to implement terms to facilitate its agricultural exports, a move that could help stabilize the situation. Amid a Ukrainian counteroffensive, however, efforts to address this issue require careful diplomacy.

Around the same time as Russia withdrew from the grain deal, India’s government announced its decision to ban the export of several varieties of rice, to ensure sufficient supplies were available at home. The decision — prompted by rising domestic food prices, stubborn inflation and fear of shortage due to El Nino disruption — pushed up prices on the global market.

Although the ban does not include the popular basmati variety, which is a staple of Gulf dinner tables, it nevertheless triggered an increase in the prices of all rice varieties, adding to the vulnerabilities of import-reliant economies in the Middle East and Africa. By the middle of August, global rice prices had jumped 15-25 percent.

The UAE imports almost 90 percent of its food, so it is especially vulnerable to fluctuations in global prices. According to Reuters data, the nation was among the top 10 importers of non-basmati rice from India in 2020, buying almost 346,000 tons. Saudi Arabia, Iraq, Iran, Yemen, Kuwait, Oman, Qatar, the UK and the US also feature on the list of the top 10 importers.




The hope is that once the dust settles on the latest Middle East political crisis, the region’s daunting food-security challenge will once again get the attention it deserves. (AFP)

Other countries that were likely to feel the squeeze as a result of India’s export ban include African nations such as Benin. But even large economies such as China were not insulated from the price shock, even though it is a major rice producer in its own right.

Arab countries that have suffered the most from higher rice prices include Egypt, Algeria and Sudan, all of which were already facing economic headwinds and footing inflated wheat import bills.

In Sudan’s case, a deadly feud between two military leaders that has been raging since April 15 has compounded the woes of a population ravaged by hunger and malnutrition.

With no end to conflicts, fuel-price rises and climate crisis in sight, experts say that besides diversifying sources of food imports, Arab countries should try to improve the resilience of their food systems by promoting domestic production, including greater investment in new agricultural technologies and innovations closer to the domestic market.

“Implementing low-cost modern irrigation and water-harvesting techniques, exploring alternative energy sources, and building resilience in dry-land agriculture can help these nations reduce their reliance on costly imports,” said Yao.

However, many Arab countries, including Egypt, Iraq, Syria and Jordan, are in no position to meet their own national demands for wheat and rice, as they lack the necessary water resources.




Many are asking what food-insecure Arab countries ought to be doing to help insulate themselves against the effects of future supply-chain shocks. (AFP)

Homegrown grain does not meet even half of Egypt’s demand, particularly for wheat and corn. The country imports more than 10 million tons of wheat — mostly from Russia and Ukraine — and that amount is expected to grow.

Local wheat production is expected to remain at 9.8 million tons, and consumption to increase by 2 percent to 20.5 million tons in 2023-2024, according to a US Department of Agriculture report published in April.

Habib ben Moussa, an expert in the environment and sustainable development from Tunisia, nevertheless believes that bolstering domestic food production and implementing sustainable farming practices could aid diversification and improve the resilience of Arab food systems.

“This approach encourages the use of native seeds adapted to local conditions, reducing dependence on imported seeds that may not thrive in the region, while promoting sustainable production and consumption not only conserves resources but also enhances resilience in agriculture,” Moussa told Arab News.

Over the past decade, Saudi Arabia has made significant strides in improving its food security, including the launch of initiatives to diversify and localize food sources, thereby reducing its dependence on imports.

This involves significant investment in agri-tech and the introduction of modern agricultural techniques to enhance local production, minimize water wastage, and boost efficiency in the agricultural sector.




CEO of Agrotrade Group, Vitaliy Bylenko examines the condition of grain in his barn in the village of Vesele, Kyiv region. (AFP)

The significance of these efforts was underscored when Saudi Arabia’s General Authority for Statistics reported in September the country had achieved self-sufficiency in the production of dates, dairy products and eggs.

The war in Ukraine and Russia’s withdrawal from the grain deal, combined with India’s swing toward protectionist trade policies, has laid bare the need for food-insecure nations to rethink and overhaul their food systems and supply chains.

“Promoting domestic food production, diversifying food-import sources, embracing local seed varieties, and adopting sustainable agricultural practices are key steps,” Yao said.

“These measures can help reduce vulnerability to global grain-market fluctuations and ensure a stable food supply for their populations.”

The hope is that once the dust settles on the latest Middle East political crisis, the region’s daunting food-security challenge will once again get the attention it deserves.

 


Syria strikes kill 6 civilians in rebel bastion: monitor

Syria strikes kill 6 civilians in rebel bastion: monitor
Updated 46 sec ago
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Syria strikes kill 6 civilians in rebel bastion: monitor

Syria strikes kill 6 civilians in rebel bastion: monitor
BEIRUT: Six civilians were killed and 25 others wounded on Saturday in Syrian army bombardment of the country’s last major rebel bastion, a war monitor said.
“Regime forces directly targeted residential areas of the city of Idlib,” said the Syrian Observatory for Human Rights, adding that industrial areas were also hit, as well as “residential areas in the town of Sarmin” nearby.
Six civilians, “including two children and a woman,” were killed in Idlib and Sarmin, while 25 others were wounded in the strikes in various areas of Idlib province, added the Britain-based Observatory.
Government forces fired “more than 35 missiles” during the bombardment, it added.
Hayat Tahrir Al-Sham (HTS), led by Al-Qaeda’s former Syria branch, controls swathes of Idlib province and parts of the neighboring Aleppo, Hama and Latakia provinces.
HTS is considered a terrorist group by Damascus, as well as by the United States and the European Union.
Parts of the rebel bastion have seen fierce fighting in recent days, according to the Observatory.
On Friday, it said 11 pro-government forces and five HTS fighters had been killed after the jihadists launched an attack in neighboring Aleppo province a day earlier.
Late last month, Syrian government bombardment killed nine civilians including six children as they harvested olives in Idlib province, reported the Observatory, which relies on a network of sources inside Syria.
Civil war erupted in Syria after President Bashar Assad crushed peaceful anti-government protests in 2011.
The conflict has killed more than half a million people and displaced millions after spiralling into a devastating war involving foreign armies, militias and jihadists.
A cease-fire brokered by Russia and Turkiye was declared in Idlib after a government offensive in March 2020, but it has been repeatedly violated.

Iraq’s Kataeb Hezbollah vows more attacks on US forces

Iraq’s Kataeb Hezbollah vows more attacks on US forces
Updated 3 min 43 sec ago
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Iraq’s Kataeb Hezbollah vows more attacks on US forces

Iraq’s Kataeb Hezbollah vows more attacks on US forces
  • Iran-aligned group has not claimed responsibility for rare attack on US embassy in Baghdad

BAGHDAD: Iraq’s Kataeb Hezbollah militia vowed more attacks on US forces in the region and said attacks against US interests on Friday were just the beginning of “new rules of engagement,” a security official from the group said in a social media post.

The Iran-aligned group, while not claiming responsibility for a rare attack on the US embassy in Baghdad on Friday, said the embassy was a forward operating base for planning military operations.

More to follow...


NGOs urge WFP, Houthis to resolve relief standoff to avert famine in Yemen

NGOs urge WFP, Houthis to resolve relief standoff to avert famine in Yemen
Updated 09 December 2023
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NGOs urge WFP, Houthis to resolve relief standoff to avert famine in Yemen

NGOs urge WFP, Houthis to resolve relief standoff to avert famine in Yemen
  • The WFP suspended the distribution of humanitarian aid in areas under Houthi control last week
  • To avert an impending famine in war-torn Yemen, the organizations proposed that the WFP and the Houthis reach an agreement

AL-KUKALLA: Twenty-two humanitarian groups working in Yemen have urged the Iran-backed Houthis and the World Food Programme to resolve their assistance distribution dispute as soon as possible to prevent widespread starvation.
The WFP suspended the distribution of humanitarian aid in areas under Houthi control last week, citing funding shortages and a dispute with the Houthis as the reasons.
The Houthis denied a UN proposal to reduce the number of recipients of aid from 9.5 million to 6.5 million, the organization said, following nearly a year of negotiations.
The 22 international organizations, which included Islamic Relief, OXFAM, Save the Children, Qatar Charity, and others, expressed “grave” concern about the impact of the food delivery suspension on Yemen’s already dire humanitarian situation in the Houthi-controlled areas.
“After years of conflict and economic decline, food aid is a lifeline for millions of Yemenis and suspending it as the country works toward peace is a catastrophic scenario. We understand the fears and concerns of the affected Yemeni people, and we stand in solidarity with them,” the organizations said in their joint appeal.
To avert an impending famine in war-torn Yemen, the organizations proposed that the WFP and the Houthis reach an agreement that would allow humanitarian aid delivery to resume in Sanaa and other Houthi-controlled districts and that international donors quickly mobilize additional funding to reduce the impact of the aid suspension, focusing on food, health, and cash aid.
“The sooner an agreement is reached, the more likelihood of averting the risk of famine conditions returning to Yemen,” the statement continued.
Yemen’s war, which began in late 2014 after the Houthis seized power militarily, has resulted in the death of tens of thousands of Yemenis and has triggered what the UN has described as the world’s worst humanitarian crisis.
The WFP dispute with the Houthis is the latest in a series of incidents in which the militia has harassed humanitarian workers and obstructed the delivery of assistance in Yemen.
In their latest report on Yemen, the UN Panel of Experts said that life-saving humanitarian goods and medicine have expired before reaching their intended recipients due to the Houthis’ obstruction of aid delivery.
The panel also accused the Houthis of diverting humanitarian funding to their backers and selling aid items in detention centers, in addition to removing the names of those who oppose their policies from the list of aid recipients.


El-Sisi poised for third term as Egyptians head to the polls

El-Sisi poised for third term as Egyptians head to the polls
Updated 09 December 2023
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El-Sisi poised for third term as Egyptians head to the polls

El-Sisi poised for third term as Egyptians head to the polls
  • Analyst sees election as precursor to new era of political diversity
  • 9,400 polling stations set up

CAIRO: Egyptian President Abdel Fattah El-Sisi is looking to secure six more years in power in the country’s presidential election, which takes place Dec. 10-12.
The president is competing against three other candidates: Abdel-Sanad Yamama of the Wafd Party, the oldest Egyptian party; Hazem Omar, head of the Republican People’s Party; and Farid Zahran of the Social Democratic Party.
Parliamentary representative Mohammed Maher El-Sebaei said: “This is a significant moment, especially for the youth, who represent 65 percent of the population.”
El-Sebaei emphasized the critical role of young Egyptians in shaping the future through voting, calling the election a “democratic celebration, marking the fifth multi-party election in Egypt’s history.”
Shawkat Al-Assar, a political analyst, emphasized that the election could provide an opportunity for broader participation and expression of opinions and said he views it as a precursor to a new era of political diversity and expansion of the public sphere.
Vote counting is scheduled to begin as soon as the polls close on Tuesday. Around 9,400 polling stations have been set up across the country and 15,000 judicial employees will be working at them over the three days of the election, supervising the procedures and transporting the ballots to where they will be counted.
The Egyptian National Elections Authority said around 11,631 sub-polling committees had been set up at the stations, which include schools, youth centers, and health units.
The authority has also invited all accredited diplomatic missions in Egypt to observe the electoral process. So far, 24 embassies have expressed their interest in observing, and 67 diplomats have registered for monitoring.
Additionally, 14 international organizations and 62 local civil-society organizations have been approved to monitor the voting, with 22,340 people receiving permits.
Officials said 528 professionals from 115 international media outlets and 4,218 from 70 local outlets have been accredited to cover proceedings.
Dedicated phone lines and video-call services with sign language interpreters will also be available and arrangements have been made to ensure that the elderly, those with special needs, and those with impaired sight or hearing will be able to vote.
Dr. Iman Karim, general supervisor of the National Council for Persons with Disabilities, said that the council had been proactive in ensuring the participation of disabled people.
The polling stations will be open from 9 a.m. until 9 p.m. on all three days of the election.


Children of Iran Nobel Peace Prize winner fear they won’t see her again

Children of Iran Nobel Peace Prize winner fear they won’t see her again
Updated 09 December 2023
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Children of Iran Nobel Peace Prize winner fear they won’t see her again

Children of Iran Nobel Peace Prize winner fear they won’t see her again
  • Her twin 17-year-old children are due to accept the award at Oslo’s City Hall and give the Nobel Peace Prize lecture on her behalf
  • In a letter smuggled out of prison and published by Swedish broadcaster SVT this week, Mohammadi said she would continue to fight for human rights even if it led to her death

OSLO: The teenage children of jailed Iranian Nobel Peace Prize winner Narges Mohammadi fear they will never meet their mother again, but said they were proud of her struggle for women’s rights as they prepared to accept the award on her behalf on Sunday.
Mohammadi, 51, who is serving multiple sentences in Tehran’s notorious Evin prison on charges including spreading propaganda, won the award on Oct. 6 in a rebuke to Tehran’s theocratic leaders, prompting the Islamic Republic’s condemnation.
Her twin 17-year-old children, Ali and Kiana Rahman, who live in exile in Paris, are due to accept the award at Oslo’s City Hall and give the Nobel Peace Prize lecture on her behalf.
In a letter smuggled out of prison and published by Swedish broadcaster SVT this week, Mohammadi said she would continue to fight for human rights even if it led to her death. But she said she missed her children the most.
Kiana Rahman, who last saw her mother eight years ago, said: “When it comes to seeing her again, personally I am very pessimistic.”
“Maybe I’ll see her in 30 or 40 years, but I think I won’t see her again,” she told a press conference via a translator. “But that doesn’t matter because my mother will always live on in my heart and with my family.”
Mohammadi was awarded the Peace Prize just over a year after 22-year-old Mahsa Amini died in the custody of Iranian morality police after being detained for allegedly violating the rules of wearing a hijab, an Islamic head scarf.
Amini’s death provoked months of nationwide protests that posed the biggest challenge to Shiite clerical rule in years, and was met with a deadly security crackdown costing several hundred lives.
The Norwegian Nobel Committee said the award for Mohammadi also recognized hundreds of thousands who had demonstrated against the theocratic regime’s policies discriminating and oppressing women.
Iran has called the protests Western-led subversion, accusing the Nobel committee of meddling and politicizing human rights.
Mohammadi’s son Ali said he had accepted from early childhood that the family would live apart, but said he would stay optimistic he might see her again.
“If we don’t see her again we will always be proud of her and go on with our struggle,” he said.
Mohammadi’s husband Taghi Rahmani said the award would give her a larger voice even if her own conditions were likely to become more difficult.
“It’s a political prize and therefore there will be more pressure on Narges, but at the same time it is going to create a space for echoing the voice of the people” said Rahmani, who will also attend Sunday’s ceremony.
Mohammadi is the 19th woman to win the prize, which today is worth 11 million Swedish crowns, or around $1 million, and the fifth person to win it while in detention.
It is awarded on Dec. 10, the anniversary of the death of Swedish industrialist Alfred Nobel, who founded the awards in his 1895 will.