IMF Warns of Risks to Food Security and Green Transition From Fragmented Commodities Markets

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IMF Warns of Risks to Food Security and Green Transition From Fragmented Commodities Markets

The International Monetary Fund (IMF) expressed concerns on Tuesday about threats to food security and cleaner energy costs stemming from fragmented commodities markets. These disruptions are primarily due to Russia's invasion of Ukraine and policy-driven reversals of integration, which have created an unstable global environment.

The IMF highlighted that critical green transition minerals such as cobalt, lithium, and copper , along with major agricultural products like wheat , are highly vulnerable. Western sanctions in response to Russia's actions have disrupted global food, fuel, and fertilizer markets, thereby exacerbating inflation pressures.

In light of China's dominance in the supply of critical minerals, the United States is actively seeking new trade partnerships. The IMF underscored this issue in its upcoming World Economic Outlook report.

The report suggests multilateral cooperation on trade policies as a preventive measure against a potential long-term growth drag of 1.2% in vulnerable countries. It also warns of up to 2% deep losses elsewhere, underlining the cost of climate change mitigation efforts.

To ensure equitable access to food and green energy resources, the IMF proposes the establishment of "green corridor agreements" and "food corridor deals". These initiatives aim to stabilize the global commodities market and reduce the potential impact on food security and clean energy transition.

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