Almost eleven months into the Ukraine conflict, the war and sanctions imposed on Russia continue to have major implications on global food and energy markets as both countries are significant exporters of grains (especially wheat and barley), agricultural fertilizers (such as potassium, nitrogen, phosphorus); and Russia is a major global producer and exporter of crude oil and natural gas.

In December, the FAO global food price index dropped slightly from November (-1.9%), driven by a steep drop in global prices for vegetable oil and some declines in cereal and meat prices.

While the FAO food price index in December was slightly below previous year’s level, its average value in 2022 was 14.3% higher than during 2021.

Global economic slowdown, with growth projected at 2.7% for 2023, will likely lead to declining commodity prices (i.e., energy, agriculture and metal) in 2023 and 2024, but they will remain at historically high levels compared to their average over the past five years.

Access to fertilizer will become the main challenge over the coming months as global fertilizer prices remain high in 2022. This will likely have a ‘profound impact’ on global food production. Global rice production in 2022/2023 is expected to decrease by 2.4% compared to 2021. Driven by climate change, dry conditions in many global breadbaskets put additional pressure on global agricultural production and prices.

The global food crisis has been partially aggravated by food trade restrictions put in place by countries to increase domestic supply and reducing prices.

As of December 2022, 19 countries have instigated 23 food export bans, and 8 have implemented 12 exportlimiting measures.

This does not happen in isolation. COVID-19-induced negative impacts on household income and demand have resulted in global supply chain bottlenecks, rising inflation, and record debt in many countries, disrupting the economic recovery from the pandemic. Evidence points to an unstable food security situation among Cambodian households, particularly for the most vulnerable and those living in flood-prone areas.

In the Asia Pacific, Cambodia is among the countries most exposed to rising energy prices owing to its comparatively high net fuel imports relative to GDP, limited domestic access to electricity, and reliance on fossil fuels. In fact, soaring oil prices coupled with a cyclical economic slowdown in the US and China, Cambodia’s largest trading partners, are key factors dampening economic growth in Cambodia, which is projected at 5.0% for 2022 and 5.4% for 2023.

To understand how these shocks are impacting food availability and access to markets in Cambodia, the World Food Programme (WFP) together with the Agricultural Marketing Office (AMO) monitors the retail and wholesale prices of key food commodities as well as market functionality in 56 urban and rural markets across the country (see Methods section). Market chiefs are also interviewed to assess market functionality, including supply and demand issues. An average of around 1,000 traders and market chiefs are called every two weeks.

Source: World Food Programme