Food insecurity may gets worse before it gets better in 2023

A confluence of events could lead to increased food scarcity in 2023, with knock-on effects for prices and an increase in the attractiveness of controlled environment production in hot countries.

As 2022 draws to a close and we approach a new year it is only natural to look to the year ahead and consider what it might bring, especially if you are an entrepreneur or business investor.

At RedSea we naturally look to our own sector and reflect on our experience as an agtech company enabling sustainable agriculture in hot climates globally. We have observed several macro trends brewing in 2022 which will lead to some turbulence in 2023.

It will probably not come as a surprise that we foresee food prices increasing globally, partly through the impact of other price rises such as energy costs but also because we expect food supplies to decrease globally. The effects of the Ukraine war and the hot summer of 2022 will really begin to bite in 2023.

Food scarcity

The impact of the Russia-Ukraine war and high energy prices in Europe are hampering supplies of fertilizer and fertilizer production, meaning fertilizer prices will continue to remain high and there will be a lack of supply. This will contribute to reduced yields of crops as farmers will be forced to alter crop inputs due to both cost and availability.

As a result, people will likely see the emergence of extreme food scarcity in the poorest countries, or in more minor ways in wealthier countries. We can expect complete shortages of food in the form of famine to reappear (possibly in the Horn of Africa) with shortages and high prices of commodities like ketchup also appearing.

Regarding climate impacts, we expect it will be very hot in the summer of 2023, again. This will fuel drought, poor pollination, crop damage and other problems globally, further reducing yields. Stored food reserves (grains and canned goods) will begin to diminish globally and in some instances run out.

Poor crop performance again in 2023 will drive discussions about urgent solutions needed.  Due to heat in traditionally temperate climates, and driven by a desire to produce locally in hot climates, existing controlled environment agriculture businesses will increasingly be looking for cost-effective, low energy, and low water solutions.

‘Food utilities’

Low to mid-income countries will begin to talk urgently about and plan for “food utilities” to protect from famine and high import food prices. Significant development aid funding will be available to support this from wealthier countries who are trying to prevent migration and regional instability/war. CEA and climate-resilient open fields will play important roles in these food utilities.

Unfortunately, the speed to execute these plans will mean that food insecurity gets worse before it gets better.

As the energy prices remain high in Europe, we will see a decrease in output from CEA in places such as the Netherlands, France and the UK during the winter as running costs will likely be prohibitive.

This leaves a gap in the winter fresh market supply, which can be filled by growers in the Middle East such as Turkey, UAE, Oman, Jordan and especially Morocco. They will be able to command a higher price for their produce abroad, but this also has the potential to bring the GCC prices up in the winter also.

With all this considered, 2023 will present unique challenges in the food sector on the global stage. For us at RedSea, addressing complex, global challenges such as food security and water scarcity in a sustainable way is part and parcel to our mission of helping to feed the world sustainably. 2023 will be no exception.

Ryan Lefers is CEO of RedSea