Global Food Prices Are Higher Today Most Of Modern History

Global Food Prices Are Higher Today Most Of Modern History

Comparing to the same time last year, global food prices rose by nearly 33% in September 2021. This is according to the UN Food and Agriculture Organisation’s (FAO’s) monthly Food Price Index. It also showed that global food prices have increased by more than 33% since July. These levels are unprecedented since 2011.

The Food Price Index measures the cumulative effect of changes in a variety of food commodities including vegetables oils, cereals and meat. It can use to compare these prices month to month. It converts actual prices into an index, based on average price levels for 2002-2004. This is the standard source to track food prices nominal prices. They are not adjust for inflation.

Nominal prices are the cost of food on the market. However, inflation adjusted prices (or “real”) prices are more relevant to food security and how easy it is for people to access the right nutrition. All goods and services are more expensive than the average income, although not always. Inflation is when buyers have to pay more for food due to the nominal price rise, but also because they have less money to spend on other goods and services, given the parallel price rises of all other items, including wages.

In August, I looked at the FAO’s inflation adjusted Food Price Index. It revealed that global real food prices were higher than they were in 2011, when food riots led to the overthrows of the governments of Egypt and Libya. Based on actual prices, it’s currently more difficult to buy food internationally than in nearly every year since 1961 when UN records began. 1974 and 1975 are the only exceptions. 1974 and 1975 are the only exceptions. What is causing food prices to soar to historical highs?

Bad Weather, Fuel Prices And COVID-19

There are many factors that influence the average international food price. Prices of different commodities fluctuate based on both universal and specific factors. The oil price increase, which began in April 2020, has had an impact on all food commodities listed on the FAO index by increasing production and transportation costs. The COVID pandemic has caused a shortage of labour to produce, harvest, process, and distribute food. This is another common cause of commodity price increases.

Since 2000, the real average cost of food has been rising. This reverses the trend of steady decline since the 1960s. Despite international efforts to meet the UN Millennium Development targets and the Sustainable Development Goals, food has become less affordable.

Since 2000, no single commodity has contributed to the average real price rise. The price index for edible oil crops has increased significantly since March 2020. This is mainly due to the increase in vegetable oils’ prices, which rose 16.9% between 2019-2020. FAO crop reports indicate that this is due to growing demand for biodiesel, and unsupportive weather conditions.

Sugar is the other major food category that has contributed most to the increase in food prices. Unfavourable weather conditions, such as frost damage in Brazil have reduced supply and inflated the prices.

Cereals Have Contributed Less Global

Cereals have contributed less to overall price rises, but their availability worldwide is crucial for food security. Global nutrition accounts for at least half of the world’s food, with as high as 80% being found in the most deprive countries. As a result, global buffer stocks for these crops have been decreasing since 2017. Despite the stabilization of global markets being help by closing down existing stores, prices have risen sharply since 2019.

The reasons behind individual fluctuations can be complicate. The FAO has reported that unpredictable or unfavourable weather conditions have been report as causing reduce harvest hopes, weather-stricken harvests, and production decline since 2000.

Europeans may be concerned about the rising cost of pasta due to Canadian droughts that have reduced wheat harvests. As the real price index of cereals climbs to levels that have sparked riots and general unrest in 2011, it is urgent that we consider how less-affluent communities can weather these stresses and avoid unrest.

Unfavorable weather is beyond our technological capabilities and socioeconomic organization. It would be a great time to think about food supply in a warmer world by more than 2 degrees Celsius, an outcome that is increasingly likely according the latest Intergovernmental Panel on Climate Change report.

Climate breakdown, without radical changes, will continue to limit international access to imported foods, far beyond any historical precedent. Food security will be affect by higher prices. And if there’s one consistent law of social science, it is that people who are hungry take drastic steps to protect their livelihoods, especially in areas where leaders are seen as failing.