IMF warns global food security worsening amid El Nino

BANGKOK -- The ongoing El Nino climate pattern is contributing to rising food prices and worsening global food insecurity, an IMF director said during a meeting in Thailand, with other experts calling for financing schemes to support vulnerable countries.

Rodrigo Valdes, the International Monetary Fund's director of the fiscal affairs department, said Thursday in a session of the IMF and World Bank annual meetings that global food prices in August reached the highest since late 2022 due to persistent droughts in Asia and Africa that damaged crops.

He said rice prices have risen 50% this year, while wheat prices rose 37% and soybeans 21%, adding that El Nino, which is expected to last until the first quarter of next year, is worsening a situation that has already been affected by high fertilizer prices stemming from the Middle East conflict.

"The ongoing El Nino is expected to strengthen further, with effects alongside rapid warming weather, water deficits and higher temperatures in Africa, Central and South America, and Southeast Asia," Valdes said during a panel session on food security.

The food price index released by the Food and Agriculture Organization of the United Nations -- which tracks prices of meat, cereals, dairy, vegetable oils and sugar -- hit 136 in September, up from 124.1 in January.

Across the globe, African countries were the most vulnerable group, adversely affected by persistent dry weather, as most are net importers of staple foods.

During the session, Somalian Finance Minister Bihi Iman Egeh said a severe El Nino has already damaged agricultural production. At the same time, wars in the Middle East and Ukraine significantly disrupted markets for food, energy, shipping and fertilizer.

"And this happened at a time when a lot of countries have weakened buffers, high debt, and high interest costs, increasing fiscal pressure," Egeh said.

To tackle the problem, he said, the country's government used digital money to reach people struggling to afford food, saying nearly 90% of Somalis were connected to the system.

"We utilized cash assistance through digital system, and it was cost-effective," he said.

With deleterious weather patterns becoming more severe, the U.N. has tried to raise funds to prevent and mitigate risks caused by extreme climate change.

Rania al-Mashat, executive secretary of the U.N. Economic and Social Commission for Western Asia (ESCWA), said climate finance and financing for food systems will be high on the agenda at the U.N. Climate Change Conference (COP31) next month in Turkey.

Climate finance refers to local, national or transnational funding -- sourced from public, private and alternative channels -- that supports actions to address climate change and mitigate risks.

"This is something that we need to keep on pushing for, and the climate crisis today creates a very good case that we need more of that financing," al-Mashat said.

She added that the Somalia model, delivering help via digital infrastructure to reach the targeted group, was an interesting model that ESCWA could apply to distribute aid funds through digital channels.

ESCWA has been trying to initiate innovative financing that can alleviate fiscal pressure, al-Mashat said, particularly in some countries where the government has a limited budget to help subsidize food when the countries were hit by severe climate that cut food production.

"We are trying to create a financing tool that can alleviate the pressure on the fiscal. Hopefully, we come out with it in the first quarter of 2027," she said.