WORLD BANK / CURRENCIES ENERGY FOOD
25-Oct-2022
00:06:41
The World Bank said that the shrinking value of currencies in most developing economies is driving increased food and fuel prices that threaten to exacerbate global food and energy crises. WORLD BANK
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STORY: WORLD BANK / CURRENCIES ENERGY FOOD
TRT: 6:41
SOURCE: WORLD BANK GROUP
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 26 OCTOBER 2022, WASHINGTON DC, USA / FILE
TRT: 6:41
SOURCE: WORLD BANK GROUP
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS
DATELINE: 26 OCTOBER 2022, WASHINGTON DC, USA / FILE
SHOTLIST
26 OCTOBER 2022, WASHINGTON DC, USA
1. Various shots, World Bank Group headquarters, John Baffes sitting
2. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“The big finding is that we have seen some declines in commodity prices from the highs that we experienced earlier in the year. However, when we look at the domestic prices, we have seen quite a bit of increase there because of the dollar appreciation. At the same time, we are projecting prices to go slightly down next year. However, there are a number of risks associated with our forecast. The biggest risks come from the macroeconomic environment, where we have a strong dollar and the high cost of borrowing. But at the same time, we have headwinds from the global economy because a lot of countries may face recession in 2023.”
3. Various shots, World Bank Group headquarters
4. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“Globally, energy prices decreased a lot, as we said, and they have declined slightly the past quarter. But in Europe, they have remained high. For example, I've seen natural gas, European natural gas prices that, a couple of months ago, they were trading as much as 10 times compared to the five-year average. So, that's a huge price increase. And we also saw large price increase in other energy prices. For example, in coal, we saw price increase there in the order of 200 percent or 150 percent.”
RECENT – WASHINGTON DC, USA
5. Various shots, Ukraine President Volodymyr Zelensky speaks virtually at the World Bank Group Headquarters during the 2022 World Bank-IMF Annual Meetings; World Bank Group David Malpass, IMF Managing Director Kristalina Georgieva, US Treasury Secretary Janet Yellin
26 OCTOBER 2022, WASHINGTON DC, USA
6. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“Now, in terms of Europe, Europe is probably the region that is facing most of the challenges when it comes to energy markets because, of course, they have to face the supply disruptions from Russian exports. The good news is currently, in terms of at least natural gas, the European markets are well-supplied, meaning all of the inventories have been rebuilt to the highest possible level. So that's the good news. But there are a lot of risks associated with Europe because everything will depend on how bad the winter is going to be. If we have a mild winter, then things would be okay, but if there's a harsh winter, then Europeans may have to face what we call energy rationing.”
7. Various shots, interior, World Bank Group Headquarters
8. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“Now agriculture prices have numerous risks. The most important risks is what happens to energy prices. Agricultural production is a very energy-intensive process, especially for oil seeds and grains, they use a lot of fertilizer, a lot of fuel, a lot of chemicals. So, if we have high energy prices or rather higher energy prices than expected, or if we have energy disruptions, that's going to certainly affect the production, the agricultural production. And of course, we are facing the problem of macroeconomic - from the macroeconomic side - the appreciation of the dollar, and the high-interest rates, and especially high-interest rates, make lending much more expensive. So, farmers will not have the capital to spend on the upcoming season, or the capital to invest or rather, the capital is going to be much more expensive than it used to be. And we have another issue in agriculture, perhaps less of an important risk is biofuels, which currently account for something between 3 percent to 4 percent of agricultural land, and they only contribute about 0.5 percent to total energy consumption. So, we use a lot of land to produce just a little energy. The issue, however, is that a lot of many policymakers may face pressure coming from the energy side, in order to ensure energy independence, they may decide to go even stronger on the biofuels side. So, we also see that as a kind of important risk in agricultural production.”
9. Various shots, exterior, World Bank Group headquarters
10. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“It's understandable that policymakers, they have to rely on subsidies, especially in the case if energy prices go up by a factor of five, then the policymakers have to respond to this. The issue we see here is that what we do recommend is that those subsidies should be a time constraint or have a sunset clause, so to speak. So, they stay in place only for some time. And then they are replaced by policies that really address the core problems and the core issue.”
11. Close up, John Baffes talking
1. Various shots, World Bank Group headquarters, John Baffes sitting
2. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“The big finding is that we have seen some declines in commodity prices from the highs that we experienced earlier in the year. However, when we look at the domestic prices, we have seen quite a bit of increase there because of the dollar appreciation. At the same time, we are projecting prices to go slightly down next year. However, there are a number of risks associated with our forecast. The biggest risks come from the macroeconomic environment, where we have a strong dollar and the high cost of borrowing. But at the same time, we have headwinds from the global economy because a lot of countries may face recession in 2023.”
3. Various shots, World Bank Group headquarters
4. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“Globally, energy prices decreased a lot, as we said, and they have declined slightly the past quarter. But in Europe, they have remained high. For example, I've seen natural gas, European natural gas prices that, a couple of months ago, they were trading as much as 10 times compared to the five-year average. So, that's a huge price increase. And we also saw large price increase in other energy prices. For example, in coal, we saw price increase there in the order of 200 percent or 150 percent.”
RECENT – WASHINGTON DC, USA
5. Various shots, Ukraine President Volodymyr Zelensky speaks virtually at the World Bank Group Headquarters during the 2022 World Bank-IMF Annual Meetings; World Bank Group David Malpass, IMF Managing Director Kristalina Georgieva, US Treasury Secretary Janet Yellin
26 OCTOBER 2022, WASHINGTON DC, USA
6. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“Now, in terms of Europe, Europe is probably the region that is facing most of the challenges when it comes to energy markets because, of course, they have to face the supply disruptions from Russian exports. The good news is currently, in terms of at least natural gas, the European markets are well-supplied, meaning all of the inventories have been rebuilt to the highest possible level. So that's the good news. But there are a lot of risks associated with Europe because everything will depend on how bad the winter is going to be. If we have a mild winter, then things would be okay, but if there's a harsh winter, then Europeans may have to face what we call energy rationing.”
7. Various shots, interior, World Bank Group Headquarters
8. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“Now agriculture prices have numerous risks. The most important risks is what happens to energy prices. Agricultural production is a very energy-intensive process, especially for oil seeds and grains, they use a lot of fertilizer, a lot of fuel, a lot of chemicals. So, if we have high energy prices or rather higher energy prices than expected, or if we have energy disruptions, that's going to certainly affect the production, the agricultural production. And of course, we are facing the problem of macroeconomic - from the macroeconomic side - the appreciation of the dollar, and the high-interest rates, and especially high-interest rates, make lending much more expensive. So, farmers will not have the capital to spend on the upcoming season, or the capital to invest or rather, the capital is going to be much more expensive than it used to be. And we have another issue in agriculture, perhaps less of an important risk is biofuels, which currently account for something between 3 percent to 4 percent of agricultural land, and they only contribute about 0.5 percent to total energy consumption. So, we use a lot of land to produce just a little energy. The issue, however, is that a lot of many policymakers may face pressure coming from the energy side, in order to ensure energy independence, they may decide to go even stronger on the biofuels side. So, we also see that as a kind of important risk in agricultural production.”
9. Various shots, exterior, World Bank Group headquarters
10. SOUNDBITE (English) John Baffes, Senior Economist, World Bank:
“It's understandable that policymakers, they have to rely on subsidies, especially in the case if energy prices go up by a factor of five, then the policymakers have to respond to this. The issue we see here is that what we do recommend is that those subsidies should be a time constraint or have a sunset clause, so to speak. So, they stay in place only for some time. And then they are replaced by policies that really address the core problems and the core issue.”
11. Close up, John Baffes talking
STORYLINE
The World Bank said that the shrinking value of currencies in most developing economies is driving increased food and fuel prices that threaten to exacerbate global food and energy crises.
In its latest Commodity Markets Outlook, the multilateral lender said oil prices on global markets had fallen 6 percent since Russia’s invasion of Ukraine February, however, weak exchange rates have seen almost 60 percent of developing economies pay more during this period.
Meanwhile, nearly 90 percent of these economies also saw a larger increase in wheat prices in local-currency terms compared to the rise in U.S. dollars.
In its latest Commodity Markets Outlook, the multilateral lender said oil prices on global markets had fallen 6 percent since Russia’s invasion of Ukraine February, however, weak exchange rates have seen almost 60 percent of developing economies pay more during this period.
Meanwhile, nearly 90 percent of these economies also saw a larger increase in wheat prices in local-currency terms compared to the rise in U.S. dollars.
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