Cambodia – Market Update – Focus: Effects of the COVID-19 pandemic and the Ukraine crisis on food prices and market functionality May 2022

Preface

A 100 days Into the Ukraine conflict, the war and ensuing sanctions imposed on Russia are having 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.

This does not happen In a vacuum. Since early 2020, COVID-19 has negatively Impacted household income and demand resulting in global supply chain bottleneCkS, rising inflation, and record debt of many countries – which, in turn, has disrupted the economic recovery from the pandemic. In addition, the effects of climate change are threatening to reduce yields in global bread baskets such as China (delayed rains) and India (heat waves).

Against this backdrop of overlaying shocks, the UN Secretary General Antonio Guterres warned on May 18 of the “spectre of a global food shortage” that could last for years.

The UN General Assembly on May 23 adopted a resolution addressing the looming global food crisis in which it calls on the international community to urgently support countries affected by the food insecurity through coordinated action.

Along similar lines, the Group of Seven (G7) industrialized nations issued a warning on May 14 about the risk of a world hunger crisis unless Russia lifts a blockade on Ukrainian grain that’s currently stuck at Ukrainian ports. The statement also stressed that war in Ukraine will threaten food security of the world’s poorest.

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 In 45 urban and rural markets across the country (see Methods section). An average of around 250 traders and market chiefs are called every two weeks. Market chiefs are also interviewed to assess market functionality, including supply and demand issues.

Source: Government of Cambodia