Без українського аграрного експорту ціни на їжу в світі зростатимуть, а в деяких країнах може настати голод, застерігає Кулеба
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No item is more essential to Mexican dinner tables than the corn tortilla. But the burst of inflation that is engulfing Latin America and the rest of the world means that people like Alicia García, a cleaner at a restaurant in Mexico City, have had to cut back.

Months ago, García, 67, would buy a stack of tortillas weighing several kilograms to take home to her family every day. Now, her salary doesn’t go so far, and she’s limiting herself to just one kilogram (2.2 pounds).

“Everything has gone up here,” she told The Associated Press while standing outside a tortilla shop. “How am I, earning minimum wage, supposed to afford it?”

Just as inflation isn’t limited to tortillas, whose prices in the capital have soared by one-third in the past year, Mexico is hardly alone. Latin America’s sharpest price spike in a generation has left many widely consumed local products suddenly hard to attain. Ordinary people are reckoning with day-to-day life that has become a more painful struggle, without any relief in sight.

Countries had already been absorbing higher prices because of supply chain bottlenecks related to the COVID-19 pandemic and government stimulus programs. Then Russia’s invasion of Ukraine in late February sent fertilizer prices sharply higher, affecting the cost of agricultural products including corn. Global fuel prices jumped, too, making items transported by truck to cities from the countryside costlier.

In Chile, annual inflation was 10.5% in April, the first time in 28 years the index has hit double digits. Colombia’s rate reached 9.2%, its highest level in more than two decades. In Argentina, whose consumers have coped with double-digit inflation for years, price increases reach 58%, the most in three decades.

In beef-crazy Buenos Aires, some households have started seeking alternatives to that staple.

“We never bought pork before; now, we buy it weekly and use it to make stew,” Marcelo Gandulfo, a 56-year-old private security guard, said after leaving a butcher’s shop in the middle-class neighborhood of Almagro. “It’s quite a bit cheaper, so it makes a difference.”

Last year, the average Argentine consumed less than 50 kilograms of beef for the first time since annual data were first collected in 1958, according to the Argentine Beef Promotion Institute. Over the past few months, prices have been “increasing a lot more than normal,” said Daniel Candia, a 36-year-old butcher.

“I’ve been in this business for 16 years, and this is the first time I’ve seen anything like this,” he said.

Latin America as a whole is suffering from “sudden price spikes for necessities,” the World Bank’s President David Malpass said during an online conference Thursday. He noted that energy, food and fertilizer prices are rising at a pace unseen in many years.

Across the world, central banks are raising interest rates to try to slow inflation. Brazil’s central bank has undertaken one of the world’s most aggressive rate-raising cycles as inflation has topped 12% — its fastest pace since 2003. Besides the factors that are stoking regional inflation, Brazil’s agricultural products have become costlier because of drought and frost. The price of tomatoes, for example, has more than doubled in the past year.

Higher rates are a government’s primary tool to fight high inflation. But jacking up rates carries the risk of weakening an economy so much as to cause a recession. Last year, the World Bank estimated that the region’s economy grew 6.9% as it rebounded from the pandemic recession. This year, Malpass said, it’s projected to grow only 2.3%.

“That’s not enough to make progress on poverty reduction or social discontent,” he added.

Brazilian newspapers are telling their readers which foods they can substitute for their usual products to help stretch family budgets further. But some items, like coffee, are irreplaceable — especially in the nation that produces more of it than any other in the world.

Ground coffee has become so expensive that shoplifters have started focusing their sights on it, said Leticia Batista, a cashier at a Sao Paulo supermarket.

“It breaks my heart, but I told many of them to give the powder back,” Batista said in the upscale neighborhood of Pinheiros.

In her own humbler neighborhood, she said, the cost of coffee “is a big problem.”

On the more upscale end of the java spectrum, Marcelo Ferrara, a 57-year-old engineer, used to enjoy a daily espresso at his local bakery. Its cost has shot up 33% since January, to 8 reais ($1.60). So he’s cut his intake to two each week.

“I just can’t afford too many of these,” Ferrara said as he gulped one down.

It has been decades since the region’s countries simultaneously suffered soaring inflation. A key difference now is that the global economies are much more interconnected, said Alberto Ramos, head of Latin America macroeconomic research at Goldman Sachs.

“Interest rates will need to go up; otherwise, inflation will run wild and the problem will get even worse,” Ramos said. “Governments cannot be afraid of using rates. It is a proven medicine to bring inflation down.”

So far, though, higher rates aren’t providing much hope that inflation will decline significantly in the near term. The International Monetary Fund last month projected that average inflation in the region, excluding Venezuela, will slow to 10% by year end. That’s not much below the 11.6% rate registered at end-2021 and still more than twice the 4.4% expected for advanced economies, according to the IMF’s World Economic Outlook.

“It will take at least a couple of years of relatively tight monetary policy to deal with this,” Ramos said.

That means belt-tightening and going without some consumer staples, for now, is likely the new norm for the poorest members of society in the notoriously unequal region. More than one-quarter of Latin America’s population lives in poverty — defined as living on less than $5.50 a day — and that’s expected to remain unchanged this year, according to a World Bank study published last month.

Sara Fragosa, a 63-year-old homemaker in Mexico City, didn’t hide her anger at rising prices during an interview at one market’s stall.

“Those who are the poorest are the worst off, while the rich only rise,” said Fragosa, who said she has replaced her regular beef purchases with quinoa and oats.

“You’re not used to it,” she said, “but you don’t have a choice.”
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India banned wheat exports without government approval Saturday after its hottest March on record hit production, in a blow to countries reeling from supply shortages and soaring prices since Russia’s invasion of Ukraine.

The announcement drew sharp criticism from the Group of Seven industrialized nations’ agriculture ministers meeting in Germany, who said that such measures “would worsen the crisis” of rising commodity prices.

“If everyone starts to impose export restrictions or to close markets, that would worsen the crisis,” German Agriculture Minister Cem Ozdemir said at a press conference in Stuttgart.

Global wheat prices have soared on supply fears following Russia’s February invasion of Ukraine, which previously accounted for 12% of global exports.

The spike in prices, exacerbated by fertilizer shortages and poor harvests, has fueled inflation globally and raised fears of famine and social unrest in poorer countries.

It has also led to concerns about growing protectionism following Indonesia’s halting of palm oil exports and India putting the brakes on exports of wheat.

India, the world’s second-largest wheat producer, said that factors including lower production and sharply higher global prices meant it worried about the food security of its own 1.4 billion people.

Export deals agreed to before the directive issued Friday could still be honored, but future shipments need government approval, it said.

But exports could also take place if New Delhi approved requests from other governments “to meet their food security needs”.

“We don’t want wheat to go in an unregulated manner where it may either get hoarded and is not used for the purpose which we are hoping it will be used for –- which is serving the food requirements of vulnerable nations and vulnerable people,” said BVR Subrahmanyam, India’s commerce secretary.

On Thursday New Delhi said it was sending delegations to Morocco, Tunisia, Thailand, Vietnam, Turkey, Algeria and Lebanon “for exploring possibilities of boosting wheat exports from India”.

It was unclear whether these visits would still take place.

Global help

Possessing major buffer stocks, India previously said it was ready to help fill some of the supply shortages caused by the Ukraine war.

“Our farmers have ensured that not just India but the whole world is taken care of,” Commerce and Industry Minister Piyush Goyal said in April.

India said that it planned to increase wheat exports this financial year, starting April 1, to 10 million tons from seven million tons the year before.

While this is a tiny proportion of worldwide production, the assurances provided some support to global prices and soothed fears of major shortages.

Egypt and Turkey recently approved wheat imports from India.

But India endured its hottest March on record – blamed on climate change – and has been wilting in a heatwave in recent weeks, with temperatures upwards of 45 degrees Celsius.

This has hit farmers hard, and this month the government said that wheat production was expected to fall at least five percent this year from 110 million tons in 2021 — the first fall in six years.

Indian wheat exports in the past have been limited by concerns over quality and because the government buys large volumes at guaranteed minimum prices.

The country’s exports have also been held back by World Trade Organization rules that limit shipments from government stocks if the grain was bought from farmers at fixed prices.

Urgent need

The Ukrainian agriculture minister has traveled to Stuttgart for discussions with G-7 colleagues on getting its produce out.  

About “20 million tons” of wheat were sitting in Ukrainian silos and “urgently” needed to be exported, Ozdemir said.

Before the invasion, Ukraine exported 4.5 million tons of agricultural produce per month through its ports – 12% of the planet’s wheat, 15% of its corn and half of its sunflower oil.

But with the ports of Odesa, Chornomorsk and others cut off from the world by Russian warships, the supply can only travel on congested land routes that are much less efficient.

G-7 ministers urged countries not to take restrictive action that could pile further stress on the produce markets.  

They “spoke out against export stops and call as well for markets to be kept open”, said Ozdemir, whose nation holds the rotating presidency of the group.

“We call on India to assume its responsibility as a G-20 member,” Ozdemir added.

The agriculture ministers would also “recommend” the topic be addressed at the G-7 summit in Germany in June, which India’s prime minister, Narendra Modi, has been invited to attend.
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Відтак більшість опозиційних представників погодилися з правлячою коаліцією щодо поглиблення процесу євроінтеграції
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Міністерка економіки розповіла, яких кроків вжив Київ, щоб позбутися дефіциту
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Elon Musk said on Friday his $44-billion deal for Twitter Inc was temporarily on hold, citing pending details on spam and fake accounts.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5% of users,” Musk said in a tweet.

Shares of the social media company fell 20% in premarket trading. Twitter did not immediately respond to a request for comment.

The company had earlier this month estimated that false or spam accounts represented fewer than 5% of its monetizable daily active users during the first quarter.

It also said it faced several risks until the deal with Musk is closed, including whether advertisers would continue to spend on Twitter.

Musk, the world’s richest man and the chief executive of Tesla Inc, had said that one of his priorities would be to remove “spam bots” from the platform.
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California’s minimum wage will rise to $15.50 an hour for workers at all businesses, large and small, on Jan. 1, 2023, under an automatic inflation trigger built into state law and never previously activated, the governor’s office projected on Thursday.

The announcement came a day before Governor Gavin Newsom, a first-term Democrat, was slated to present his revised budget plan to the state legislature controlled by his party, including a proposed $11.8 billion inflation-relief spending package.

The economic stimulus proposal, similar to one enacted last year to help California recover from the COVID-19 pandemic, includes a plan Newsom previewed in recent weeks offering $400 tax rebates to vehicle owners to help offset escalating gasoline costs.

Newsom said his package taps into a “historic” state budget surplus to help individuals and families cope with rising costs of living, which the state Finance Department projects will grow 7.6% between fiscal year 2021 and fiscal 2022.

Regardless of whether Newsom’s package becomes law, the Finance Department estimates that some 3 million workers stand to benefit from the first inflation-based minimum wage hike expected to take effect under a labor statute enacted in 2016.

That law requires an automatic 50-cent-per-hour increase above California’s prevailing minimum wage levels – already the highest any state requires for larger companies – whenever the U.S. consumer price index rises more than 7% from year to year.

That means the statewide minimum wage for companies employing 26 or more workers, and those with 25 or fewer workers, will both go to $15.50 in the new year. Without an inflation trigger, the minimum wage for smaller companies was due to have topped out at $15 in January, catching up with the level now required at larger firms.

Only two states — Massachusetts and Washington state — exceed California’s existing $14 minimum wage for smaller companies. They require at least $14.25 and $14.49 per hour, respectively, at businesses of all sizes, U.S. Labor Department figures show.

The District of Columbia is higher still, at $15.20 an hour. The U.S. federal minimum hourly wage is currently set at $7.25.

Other highlights of Newsom’s inflation package include $2.7 billion in emergency rental assistance for low-income tenants and $1.4 billion to help utility customers pay overdue bills.

The California Republican Party issued a statement urging the legislature to suspend state gasoline taxes as “the most effective way to relieve pain at the pump.”
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Chinese Premier Li Keqiang has suggested that China’s current job market is “complicated and severe” as the country maintains “unswerving adherence” to the “zero-COVID” policy, whose lockdowns are causing a severe economic contraction throughout the nation.

Derived from a survey of 430 private industrial companies, the Caixin purchasing managers’ index, a reliable indicator for assessing the economy, fell to 36.2 in April from 42 in March, according to a survey released by IHS Markit last week. A reading below 50 indicates contraction, while anything above that gauge shows expansion.

“Demand was under pressure, external demand deteriorated, supply shrank, supply chains were disrupted, delivery times were prolonged, backlogs of work grew, workers found it difficult to return to their jobs, inflationary pressures lingered, and market confidence remained below the long-term average,” said Wang Zhe, senior economist at Caixin Insight Group.

“Keeping market players and securing jobs will win the future,” Li said Saturday, during a national video and teleconference on stabilizing employment, according to the China Daily, a state-controlled news outlet.

Li, who holds the number two position in the Chinese Communist Party (CCP), urged all regional government departments to “conscientiously implement the decisions and arrangements” of the party’s Central Committee and the State Council to maintain jobs and economic stability.

“Stabilizing employment is critical to people’s livelihood and is the key support for the economy to run within a reasonable range,” he said, as he recommended steps for local and provincial governments.

Li asked enterprises to resume production while adhering to the controls designed to contain the spread of COVID-19.

Lockdowns in more than 20 cities, including Shanghai, have frustrated residents and constrained China’s economic growth. WHO Director-General Tedros Adhanom Ghebreyesus said on Tuesday that China’s zero-tolerance strategy was not sustainable, a comment Foreign Ministry spokeperson Zhao Lijian called “irresponsible” a day later.

Global banks such as UBS, Standard Chartered, DBS, Barclays and Bank of America have downgraded their 2022 GDP (gross domestic product) forecasts for China.

China’s first-quarter GDP for 2022 expanded by 4.8% year-on-year, higher than expected but still below Beijing’s full-year target of 5.5%, according to Xinhua, a state-affiliated news outlet.

Liu Meng-chun, managing director at Chung-Hua Institution for Economic Research in Taipei, Taiwan, said the slowdown is attributable not only to China’s COVID policies but also to a crackdown on private enterprise, especially in the technology sector.

He foresees the state taking a financial stake in some of the technology giants to get more control over their operations but said the change would be more one of style than of substance.

“If 1% equity is used to enter the core decision-making circle of its (technology companies) and becomes internal supervision, it represents a change in the supervision model,” Liu said.

Ming-Fang Tsai, a professor at the Department of Industrial Economics at Tamkang University in Taipei, said that even if Beijing stops suppressing tech giants, it would be difficult to return to the era of rapid economic growth.

“Alibaba and Tencent are laying off workers significantly, and now (Beijing) has said that it will stop (the suppression). It will not have any impact on China’s economy,” Tsai told VOA Mandarin.

The tech layoffs fit into a larger picture as China’s economy has been hit by the “five crises” of employment, exports, private investment, real estate and debt defaults, leading its economy into a downward cycle, according to Wu Jialong, a Taipei economist.

Reduced demand for China’s exports, “will reduce employment, income and consumption power, which will affect real estate,” Wu said. “In addition, industrial supervision and common prosperity will also make things worse, which will hurt the willingness and ability of private investment and eventually lead to a crisis of debt default.”

According to Taiwanese economist Liu, if China’s zero-COVID policy lasts for a long time, industries such as real estate, finance and technology will be hit hard, as will retail and consumer services. The combination, he said, will delay the country’s “common prosperity” campaign launched by President Xi Jinping.

“The control of the epidemic will make income distribution more uneven. Polarization will become more serious,” Liu told VOA Mandarin.

According to Xie Tian, an associate professor of marketing at the University of South Carolina Aiken, even if the zero-COVID policy caused the Chinese economy to collapse, Chinese authorities would be more likely to return to the planned economy of the Mao Zedong era than to adjust to current forces.

“Now the CCP has launched a lot of ‘supply and marketing cooperatives,’ ‘unified purchase and unified sales,’ just to deal with the economic impact that the city lockdowns may bring, because it wants to suppress the people, and the government controls all goods, sources of goods and channels to achieve its political goals.” Xie told VOA Mandarin.

“Unified purchase and unified sales” refers to a policy implemented by China from the 1950s to the 1980s to exert state control over agricultural resources such as grain and cotton. The Chinese government purchased these products in rural areas and rationed them out to city dwellers.

In July last year, China began a pilot program of “supply and marketing cooperatives.” This recalls how the CCP acted as it established a government in 1949 during a post-civil war period of material scarcity.
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Canadian energy experts see the global spike in oil prices – exacerbated by the war in Ukraine – as a two-edged sword, spurring a rush to develop renewable energy sources while simultaneously encouraging increased production of environmentally damaging fossil fuels.

For Canada, a major energy exporter with the potential to fill part of the gap created by the broadening boycott of Russian energy sources, the balancing act is especially delicate.

The left-leaning government led by Prime Minister Justin Trudeau has pledged to make major investments in renewable energy. But the country is also home to the Alberta tar sands, described by National Geographic magazine as “the world’s most destructive oil operation.”

Speaking in Vancouver in late March, Trudeau announced a plan to spend $9.1 billion by 2030 to reduce carbon emissions through support for electric vehicles, energy-efficient homes and vehicles, wind and solar projects, support for sustainable farming and other measures.

“The leaders I spoke with in Europe over the past few weeks were clear,” Trudeau told reporters at the time. “They don’t just want to end their dependence on Russian oil and gas, they want to accelerate the energy transformation to clean and green power.

“The whole world is focusing on clean energy and Canada cannot afford not to do that,” he said.

But Trudeau’s long-term ambition may be complicated in the short term by the rising demand for oil from Canada – the world’s fourth largest exporter – and a renewed interest in the Alberta tar sands, which have become more profitable than they have been for years.

The environmental group Greenpeace Canada last year called for a halt to development of the heavy and hard-to-extract bitumen, saying, “The world can’t afford to expand the Alberta tar sands, not if we want to preserve this planet for future generations.”

And with world oil prices as low as $50 a barrel in recent years, many producers had in fact shelved plans to expand production, mainly because of high start-up costs that made the effort unprofitable. But with current prices topping $100 a barrel, the heavy sludge is suddenly much more appealing.

“It is certainly true that higher oil prices will increase interest in all oil resources, including the Canadian oil sands,” said Mark Finley, a former manager and analyst with an energy focus at the CIA. He is currently with Rice University’s Baker Institute for Public Policy. 

“Moreover, a growing interest in resilient supply chains and what U.S. Treasury Secretary [Janet] Yellen has called ‘friend-shoring’ will also work to the advantage of Canadian producers,” Finley said in an interview.

Hadrian Mertins-Kirkwood, an expert with the Canadian Center for Policy Alternatives, said it is “too soon to tell” what impact the war in Ukraine will have on energy investment in Canada. “We’re not seeing a lot of investment into new fossil fuel projects at this point, but that could change if the war drags on and prices stay high.”

Mertins-Kirkwood said industry announcements show “that investment in fossil fuels is up this year. That’s mainly due to rising oil prices, which started last year but really picked up after the Russian invasion.”

“Specifically, oil companies in Canada are intensifying production, which means they’re trying to get more oil out of existing projects to take advantage of the current price environment.”

On the green energy side, Mertins-Kirkwood suggested the Trudeau government’s spending plans fall far short of what its own calculations show will be needed to reach its goal of net-zero carbon emissions by 2050.

The most recent federal budget says Canada will need to between $125 billion and $140 billion of investment every year to reach that goal, he said, far beyond the current rate of investment in the climate transition of $15 billion to $25 billion.

But Finley said the Trudeau administration’s green ambitions are not necessarily in conflict with the renewed interest in Alberta’s tar sands. 

“The outcome of this situation, I think, could be both more investment in oil and gas, and an accelerated interest in pursuing the transition [to renewable energy],” he said. “In that sense, there should be common ground to be found between the government in Ottawa and government/industry in Alberta.

Finley noted that Canada is a natural partner for other Western countries as it belongs to many of the same key institutions, including the International Energy Agency, NATO and OECD, as well as being a major energy exporter.

“As the United States and Europe focus on diversifying supplies away from Russia, what kind of countries are likely to be perceived as reliable partners?” he asked.  “Canada would certainly be high on the list.”
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