Food Price Inflation Still High Worldwide

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  • Economy. Markets


Since January the agricultural, export, and cereals price indices closed 3 percent, 7 percent, and 1 percent higher, respectively, said World Bank in its latest report on food security in February.


 

 

 

Since January the agricultural, export, and cereals price indices closed 3 percent, 7 percent, and 1 percent higher, respectively, said World Bank in its latest report on food security in February emphasizing that most world countries suffered from flood inflation.

 

The bank said in the report published on Friday that food price inflation has not changed since September 2023, and it remained higher than 5 percent in 63.2 percent of low-income countries, 73.9 percent of lower-middle-income countries, and 44.4 percent of high-income countries, with the latter shrinking its influence by 1.9 percent. In real terms, that is defined as food inflation minus overall inflation; it was higher than the latter in 71 percent of the 165 countries.

 

The highest increase affected cocoa and coffee prices, which rose by 8 percent. While weekly maize and wheat prices closed 1 percent and 4 percent
higher, and rice prices were steady.  On a year-on-year basis, maize prices are 33 percent lower, wheat prices are 20 percent lower, and rice prices are 32 percent higher.

 

The World Bank analysts assessed a high energy price and recent attacks by Houthi terrorists on ships in the Red Sea that decreased trade volume in the Suez Canal by 40 percent were the most crucial reasons for food price inflation. According to an analysis by a British think-tank, Chatham House, approximately 14 percent of cereals and 4.5 percent of soybeans traded globally pass through the Suez Canal. The disruption in the Red Sea is affecting key wheat exporters such as the European Union, Russia, Ukraine, Australia, India, Indonesia and New Zealand. Changed routes involve higher costs related to more fuel and operations.

 

Along with high price inflation, food security declined worldwide. "It is estimated that the number of severely food-insecure people globally rose from 624 million in 2017 to 900 million in 2022." The report projects that most areas in the northern parts of Latin America, central Asia, and West and Central Africa   will remain food insecure. Food shortages will affect conflict zones, including Myanmar and Ukraine.

 

Given high consumer price inflation, the report underscored the need for global policy efforts to address food insecurity. Policymakers should rethink the export caps and bans introduced during the pandemic, which elevated the prices of major food commodities, including rice, soybean, wheat, sugar, and chicken meat.

 

 


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