World Bank to provide additional $12B to address ‘devastating’ global food crisis

The World Bank announced Wednesday an additional $12 billion in funding to mitigate the "devastating effects" of severe growing global food insecurity driven by climate change and Russia's invasion of Ukraine.

The move, which will bring total available funding for projects over the next 15 months to $30 billion, was unveiled hours before a major United Nations meeting on global food security.

Amid the growing shortages intensified by the war in Ukraine, a key grain producer, the new funding will help boost food and fertilizer production, facilitate greater trade and support vulnerable households and producers, the World Bank said.

"Food price increases are having devastating effects on the poorest and most vulnerable," World Bank President David Malpass said in a statement. 

"It is critical that countries make clear statements now of future output increases in response to Russia's invasion of Ukraine."

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The bank previously announced $18.7 billion in funding for projects linked to "food and nutrition security issues" for Africa and the Middle East, Eastern Europe and Central Asia, and South Asia.

Russia's invasion of Ukraine and international economic sanctions on Moscow have disrupted supplies of fertilizer, wheat and other commodities from both countries, pushing up prices for food and fuel, especially in developing nations.

And India over the weekend banned wheat exports, which sent prices for the grain soaring.

"Countries should make concerted efforts to increase the supply of energy and fertilizer, help farmers increase plantings and crop yields, and remove policies that block exports and imports, divert food to biofuel, or encourage unnecessary storage," Malpass said.

- Ukraine only 'latest shock' -

Washington welcomed the decision, which is part of a joint action plan by multilateral lenders and regional development banks to address the food crisis.

"The Russian war against Ukraine is the latest global shock that is exacerbating the sharp increase in both acute and chronic food insecurity in recent years driven by conflict, climate change and economic downturns, such as those associated with the Covid-19 pandemic," the Treasury Department said, applauding the institutions for working swiftly to address the issues.

The situation will only grow worse because of the Ukrainian war, experts warn, as Russia and Ukraine alone produce 30 percent of the global wheat supply.

Secretary of State Antony Blinken is due in New York on Wednesday to chair a UN meeting on global food security.

Vellamvelly Muraleedharan, India's minister of state for external affairs, also is due to participate in the meeting.

Washington's UN ambassador, Linda Thomas-Greenfield, on Monday urged New Delhi to revoke the ban announced Saturday in the face of falling production caused primarily by an extreme heatwave.

She said Wednesday's session aims to "bring countries together to look at what countries might be able to help fill the gap" in wheat supplies caused by the Russian invasion of Ukraine.

But food insecurity had begun to spike even before Moscow invaded its neighbor on February 24.

UN data showed that 193 million people in 53 countries were acutely food insecure last year, meaning they needed urgent assistance to survive.

Agence France-Presse

Oil prices jump, stocks mixed with spotlight on surging inflation

LONDON - Oil prices rallied Wednesday, adding to soaring inflation concerns, while stock markets diverged.

Crude futures jumped 2.5 percent with Brent North Sea headed towards $120 per barrel.

Russian Deputy Prime Minister Alexander Novak on Wednesday warned that a ban on Russian oil and gas imports over the Ukraine war would drive the world's energy markets to a "collapse". 

"It is absolutely obvious that without Russian hydrocarbons, if sanctions are introduced, there will be a collapse of the oil and gas markets," Novak told Russia's lower house State Duma as reported by Russian news agencies.

"The rise in energy prices may be unpredictable," Novak added. 

On stock markets, London's benchmark FTSE 100 index was up after official data showed UK annual inflation had surged to 6.2 percent last month, the highest level in 30 years. 

While inflation increases company costs it can boost their revenues by sizeable amounts. 

The British data were published ahead of a UK budget update Wednesday that could ease a cost-of-living crisis for millions of Britons as inflation rockets worldwide largely owing to soaring energy prices. 

"Today's data confirm a worsening squeeze on consumer incomes," said Yael Selfin, chief economist at KPMG UK.

"These price rises were dominated by increases in energy, and we expect further rises this year as global energy, food, and other commodities markets are impacted by Russia's invasion of Ukraine."

Elsewhere, eurozone stock markets fell Wednesday after Asia's top indices closed higher.

Wall Street had rallied Tuesday on optimism that the Federal Reserve's plan to hike interest rates would help to bring inflation under control.

While there remains plenty of concern about the war in Ukraine, analysts said some confidence had seeped back into trading floors as investors bet on consumer resilience and economies continue to reopen.

Federal Reserve boss Jerome Powell this week said that the US central bank was prepared to act more aggressively on lifting borrowing costs should American inflation -- already at a 40-year high -- not fall quickly enough.

Officials lifted US rates last week by a quarter of a point but some have advocated bigger increases, a view Powell suggested he was open to believing that the world's biggest economy was strong enough to withstand such a move.

Agence France-Presse

Russia sanctions ripple across world markets, rouble tanks

LONDON - World stocks slid, oil prices jumped and the rouble tanked to fresh record lows on Monday, as the West ramped up sanctions against Russia for its attack on Ukraine that included blocking banks from the SWIFT global payments system.

Russia's central bank raised its key interest rate to 20 percent from 9.5 percent in an emergency move, and authorities told export-focused companies to be ready to sell foreign currency as the rouble slid almost 30 percent to record lows versus the dollar. 

As an economic crisis loomed in Russia, the fallout of tougher sanctions from the West imposed over the weekend rippled out across financial markets.

European stocks slumped 2 percent. European banks most exposed to Russia, including Austria's Raiffeisen Bank, UniCredit and Societe Generale, dropped between 9 and 15 percent, while the wider euro zone banking index fell 7 percent.

US stock futures were deep in negative territory, although MSCI's broad gauge of Asia shares and Japan's Nikkei eked out small gains.

"The trading environment is highly dynamic, and we maintain a defensive stance as things could get a lot worse from here," said Peter Garnry, head of equity strategy at Saxo Bank.

Oil prices meanwhile surged after Russian President Vladimir Putin put nuclear-armed forces on high alert on Sunday, the fourth day of the biggest assault on a European state since World War Two. 

The ramp-up in tensions heightened fears that oil supplies from the world's second-largest producer could be disrupted, sending Brent crude futures up 5 percent to $102.86. US. West Texas Intermediate crude futures were up $4.62 or almost 5.0 percent at $96.24 a barrel.

"I am telling clients all we know for certain is that energy prices are going to be higher, and there are going to be some beneficiaries," said John Milroy, Ord Minnett financial advisor in Sydney.

"It's an old cliché, but it's true that uncertainty drives moves in both directions." 

SAFE-HAVENS SHINE

As uncertainty continued to grip markets, investors plumped for the safety of the dollar, Swiss franc and Japanese yen.

The euro slid 1 percent to $1.1168 and 0.9 percent to 129.08 yen, while the risk-sensitive Australian and New Zealand dollars fell 0.5 percent and 0.3 percent, respectively.

Sovereign bonds such as the US. Treasuries and German Bunds -- regarded as among the most safest assets to hold globally -- remained in strong demand.

The 10-year US. Treasury yield was down around 7 basis points to 1.90 percent in London trade, and equivalent German yields were down 6 basis points to 0.16 percent.

Money markets continued to push back rate hike expectations with investors now pricing roughly 30 basis points worth of tightening from the European Central Bank in total this year, down from 35 bps late last week. 

Gold was last up 0.61 percent to around $1,899.

Russia's rouble dived almost 30 percent to a record-low 120 per dollar, but recovered some ground to last trade at just over 100 to the dollar.

MSCI's Russia equity index slid 25 percent, while London and Frankfurt-listed Russian equity exchange traded funds (ETFs) tanked more than 35 percent as investors dumped Russian assets.

(Reporting by Dhara Ranasinghe; Additional reporting by Kevin Buckland in TOKYO; editing by Jason Neely)

-reuters