Highlight

• Increased food and fertilizer prices, slower growth, and currency fluctuations still severely strain food security, especially in the Near East and North Africa (NENA) region, which has a high reliance on international food markets and is highly exposed to global price surges. High international food prices increase import bills and negatively affect NENA countries’ trade balances and foreign exchange reserves.

• The Russian Federation and Ukraine combined accounted for about 75 percent of Egypt and Lebanon’s total wheat and wheat flour imports in 2021. Thus, the Ukraine crisis poses a severe supply side challenge to Arab countries, in addition to further inflating global food prices.

• Although many countries in the NENA region subsidize several essential commodities to limit price transmission from the global markets, the year-on-year food inflation rates exploded in some cases (Lebanon and Sudan), and increased substantially in others (Algeria, Djibouti, Egypt, Morocco and Tunisia). The food price inflation in the region is mainly driven by price increases of non-subsidized staples (fruits, vegetables, meat and dairy), the spillover effect of higher oil and energy prices, and supply chain bottlenecks.

• In the Near East and North Africa, harvesting of winter wheat yields finalized under mixed conditions with below to well below-average yields in Morocco, central and western Algeria, central Tunisia, The Syrian Arab Republic, Iraq due to persistent dryness as well as conflict in the Syrian Arab Republic. In North Africa, aggregate cereal production in 2022 is estimated at 11 percent below the average and 16 percent below the production of the previous year. In Sudan (the), the 2021 aggregate cereal production is estimated at 35 percent below the output obtained in the previous year.

• Due to the droughts and reduced domestic production, cereal import requirements have increased in 2022/23 in Arab countries. However, various factors limit the room for manoeuvre of regional governments to procure cereals from abroad, such as high international grain and transport prices, the Ukraine crisis, more expensive alternative import sources, and reduced production or export bans implemented by some major exporting countries.

• Countries in the region have implemented a wide range of measures to tackle food security challenges and increase resilience to global shocks, such as supporting domestic agriculture, increasing the area of the wheat crops to raise self-sufficiency (Egypt), reference price increases for purchasing local production (Algeria, Iraq and Tunisia), establishing a storage premium for wheat (Morocco), creating an irrigation water subsidy (Algeria) or providing feed at reduced prices to offset the rising costs of animal feed (Morocco). In addition, many countries in the region have increased subsidies to vulnerable people. In some cases, however, the reduction of seed and fertilizer subsidies has negatively affected wheat output (Iraq). Many countries are boosting food stocks; for example, increased food reserves in Jordan have limited recent food price inflation.

• Most of the trade policy measures in the food and agriculture sector introduced by NENA countries since the beginning of the Ukraine crisis were trade restricting (23 measures).

• Due to their dependence on international commodities markets including the Russian Federation and Ukraine to a large extent, several countries in the region aim to increase the diversification of imports (Egypt, Morocco) from countries such as Brazil, Argentina or India.

• Budgetary constraints often limit regional countries’ ability to mitigate food security risks. As a result, national and international financial institutions have been stepping up efforts to raise funds for Arab countries to support vulnerable households, strengthen countries’ resilience to food crises and enhance reforms in food security policies.