"We talk a lot about gasoline prices because that's what affects Americans but the bigger issue is food," Fink said. "There has been tremendous destruction of arable land in Ukraine.....Globally the cost of fertiliser is up almost 100 per cent and that additional cost is reducing the amount of fertiliser used in farming. That is harming the quality of the crop worldwide."
Although lower oil prices have started to feed through to the price at the pump for motorists, consumer goods companies are continuing to see high input costs. Any drop in fertiliser prices is likely to come too late to boost this year's food harvests.
The World Bank forecast after the invasion that global food prices would rise 20 per cent this year, far outpacing raw materials.
The impact is particularly grim in Africa, which usually imports grain from Ukraine as well as producing its own food. Fertiliser prices there have risen 300 per cent, and the continent is facing a shortage of 2mn metric tons, according to the African Development Bank. It has approved a US$1.5 billion ($2.4b) programme to help farmers fill the gap but warns that total production could fall by 20 per cent this year.
Janet Yellen, the US Treasury secretary, said on Friday that the world was facing "an extremely difficult time for global food security" and urged the G20 group of leading nations to halt stockpiling and export restrictions on food and provide additional financial assistance to countries and people struggling with food insecurity.
Bill Gates, the philanthropist and Microsoft co-founder, flagged similar concerns this week, saying that the reduction in supplies of wheat, edible oils and other foods caused by the war in Ukraine was "driving up food prices, which will increase malnutrition and instability in low-income countries." He noted in a blog post that improving agricultural productivity in Africa required "far more investment".
While some consumer products makers and food retailers say they are hopeful that food price inflation will begin to ease, others are preparing for the worst.
Snack foodmaker Mondelez is seeing so much inflation and "availability issues" in edible oils and grains that "we are looking into flexible formulation to make sure that we can replace some ingredients and components that are in shortage with something that is more available," Luca Zaramella, the chief financial officer said last month.
General Mills is predicting a "significant step up in input cost inflation" to 14 per cent for the fiscal year that started in June. CEO Jeff Harmening said last month that the maker of Cheerios as well as Pillsbury and Betty Crocker home baking products expects to see "reduced consumer spending power".
Written by: Brooke Masters and Andrew Edgecliffe-Johnson
© Financial Times