SINGAPORE — Olam Agri, the food, feed and fiber agribusiness subsidiary of Singapore-based Olam Group, has secured a US$200 million loan from the International Finance Corporation (IFC) to boost food production.
Olam said the loan will be used to finance the purchase of wheat, maize and soy from Canada, Germany, Latvia, Lithuania and the United States.
The commodities then will be delivered to Olam’s processing operations and customers in developing countries, including Bangladesh, Cameroon, Chad, Egypt, Ghana, India, Indonesia, Nigeria, Pakistan, Senegal, Thailand and Turkey.
The loan is a part of IFC’s broader efforts to address food insecurity in light of rising food prices driven by impacts of COVID-19, adverse climate events and the ongoing Russia-Ukraine war.
According to a statement, the loan, which has the potential of feeding over 40 million people will further support flows of key food commodities to developing countries, which have been reliant on sourcing from the Black Sea region.
The goal is to help ease food price inflation, particularly in fragile, conflict-affected, and poorer countries that are net food importers, which are among the worst affected, and where food purchases comprise an outsized share of disposable incomes.
Regional Industry Director, Manufacturing, Agribusiness and Services, Asia Pacific at IFC, Rana Karadsheh explained the partnerships with key agricultural commodity-trading companies such as Olam Agri were crucial to maintaining the flow of critical food staples between countries with surpluses and deficits.
N Muthukumar, chief executive officer, operations, Olam Agri added: “This facility further supports us to continue to supply staple crops and ensure food security to some of the most populous countries in Asia and Africa most at risk of global food inflation.”
food prices as measured by the Food and Agriculture Organization’s (FAO’s) Food Prices Index are at their highest level since the series started in 1990 and low-income countries and families stand to be the most affected.
Across countries, developing economies typically have a higher share of food in their overall consumer baskets—and hence in their Consumer Price Index (CPI)—compared to advanced economies. For example, food and beverages account for 54% of CPI in Ethiopia and 50.7% in Nigeria, compared to just 11.6% in the United Kingdom.
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