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Countries Restrict Exports for Security, Control Inflation

Governments around the world are taking steps to safeguard food supplies as inflation soars due to supply-chain disruptions caused by the COVID-19 pandemic and the war in Ukraine.

Food prices have hit all-time highs.

Jon Super/Xinhua/Getty Image

Public discontent over soaring food prices poses political risks for governments, particularly if shortages present themselves in major crop producers. That’s the case with palm-based cooking oil in Indonesia, where there have been public protests against high prices.

“As the world’s largest producer of palm oil, it is ironic that we actually have difficulty getting cooking oil,” said Indonesian President Joko Widodo on April 27, according to an official transcript. “As president, I cannot allow that to happen,” he added ahead of an export ban of the vegetable oil that went into effect on April 28.

There’s a risk that soaring food prices could spur even more protectionist measures across the world, said Nomura economists Sonal Varma and Rangga Cipta in a note on April 26.

“Rising food prices risk more such protectionist measures globally, and could further stoke food price inflation in Asia,” Varma and Cipta wrote.

“This is a real and present concern,” said Jamus Lim, an associate professor of economics at the ESSEC Business School.

The last time the world went through an agricultural commodity price shock was in the aftermath of the global financial crisis from 2007 to 2008. At the time, Ukraine and other major grain exporters restricted exports to protect domestic prices. Major rice exporters India and Vietnam restricted rice exports to counter food inflation.

The scenario could repeat itself, “especially since the situation is complicated by even more factors today, including COVID-19-induced supply chain disruptions and the ongoing Russo-Ukrainian conflict,” Lim told Insider.

Here are five countries that have banned or restricted key agricultural exports in the last year. While most of them imposed measures after the war in Ukraine started, some ramped up existing restrictions to deal with further price surges on the back of the conflict.

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