RADHICA DE SILVA
Agricultural economist, Omardath Maharaj, is calling on the government to put a contingency plan in place immediately to address food security in the face of Russia’s attack on Ukraine.
In an interview, Maharaj said the Russian invasion in Ukraine will trigger a rush in global stock and commodity markets, as well as a further increase in food prices.
“It will also affect availability issues for import-dependent countries like T&T,” Maharaj added.
He explained that energy insecurity and political and social instability caused by the attack will trigger a realignment of global trade and logistics, exacerbating the difficulties already experienced worldwide due to the COVID-19 pandemic.
He added, “Diplomacy and the interconnectivity of nations, treaties and agreements will challenge leaders soon enough to choose sides or face sanctions from the USA and other bodies. Both Russia and Ukraine are very important to the economy and security (food and energy) of China.”
For import-dependent countries like T&T, Maharaj said international crises especially associated with our major trade partners—USA and China—can have deep repercussions for the T&T local economy.
“In a world without rules, fragmentation and disruption, it puts T&T, and other CARICOM members—more than 18 million people—in an awkward and exposed position in those dynamics, further compounded by our history of mismanagement, underdevelopment, lack of diversification, rising debts, and now constrained resources and declining economies,” Maharaj said.
He noted that T&T did have an important direct trade relationship with Russia.
“However, T&T imported just about US$4 billion in mineral fuels and oils from the Russian Federation between 2011 and 2018; an annual average of about US$495 million. This crashed in 2019 perhaps with the closure of the Petrotrin Refinery,” Maharaj said.
He explained that between 2016 to 2020, Russia supplied 2.36 per cent of China’s total imports across key sectors including food and energy. This trade accounted for 12.36 per cent of Russia’s total exports.
He noted: “Overall, food and agriculture products represent an annual average of 18.63 per cent of total CARICOM imports, or US$ 5.33 billion.”
He added: “For T&T (2014-2018), food and agriculture products represented an annual average of 4.09 per cent of total Chinese exports to this country, worth almost US$ 17 million. Total Chinese exports to T&T were estimated to be approximately US$ 348 million in 2018.”
Because of this, Maharaj said the Russian attack on Ukraine was of major concern for trade partners, not only for direct business with these key nations, but with those countries, ports, and freight that are connected via the global trade ecosystem.
Aside from food and merchandise trade, the developing world also relies heavily on imported technology and human capacity building.
“T&T’s (2014-2018) total imports averaged US$ 7.65 billion. Food and agriculture products imported are estimated to be US$ 959 million annually or 13.2 per cent of total imports,” Maharaj said.
He explained, “We need to have a serious rethink of development policy and planning in agriculture; a sector that has suffered from a history of underinvestment and failed policy. In order to systematically reduce our reliance on foreign food products and bolster our own capacity, there must be a fundamental shift in the sector’s priority, raising it on the national development agenda which is to be supported by an overarching national policy framework for sustainable agriculture and rural development.”
Maharaj also said he was concerned about recent reports of diminished import cover.
“Reduced foreign revenue and reserves in the face of maintaining our import dependence and debt servicing alone is a challenge. The potential for increased food prices globally is gaining momentum with restrictions, production and product sourcing, transportation and evolving food safety issues,” Maharaj said.
While higher prices may ease demand, Maharaj said T&T imports staple food products, especially rice, fruits, vegetables, dairy products and meats, including seafood.