Food Prices Reach Record Highs Across the Globe: Here’s Why

by Quentin Blount
food-prices-reach-record-highs-across-the-globe-heres-why

Food prices continue to rise around the world and in February we hit record highs. The high costs of dairy and vegetable oils led to the surge.

What You Need To Know

  • World food prices reached record highs in February
  • Food costs are up an astounding 20 percent from last year
  • The rise in food prices can be blamed on crop conditions and reduced export availability
  • Russian invasion of Ukraine could push food prices even higher
  • High costs of food could leave millions hungry in Africa

That’s right, Outsiders. Would you believe us if we told you that world food prices are up 20.7 percent from last year? That figure comes straight from the United Nations’ Food and Agriculture Organization (FAO). They track the prices of the world’s must-have foods.

But why exactly have world food prices been skyrocketing over the past year? FAO economist Upali Galketi Aratchilage says that not only are crop conditions and reduced export availability to blame but so, too, are increases in other commodity costs.

“A much bigger push for food price inflation comes from outside food production, particularly the energy, fertilizer, and feed sectors,” he said. “All these factors tend to squeeze profit margins of food producers, discouraging them from investing and expanding production.”

Countries Reliant on Food Imports Are at Risk of Going Hungry

The data for food prices collected for the February report was put together prior to the Russian invasion of Ukraine. Since both countries are key players in the global agricultural trade, each accounting for about 25 percent of the world’s wheat exports, 14 percent of corn exports, and a combined 58 percent of sunflower oil exports, it could lead to dire consequences for poorer countries that are reliant on food exports.

Wandile Sihlobo is the Chief Economist of the Agricultural Business Chamber of South Africa. He says that parts of Africa could go hungry in as little as three months if the Russian invasion continues.

“As net importers of products like wheat, which influences bread and cereals, sunflower oil and maize, African countries are fairly exposed on some of these supplies that are coming out of Russia and Ukraine,” Sihlobo said. “There will be challenges if the war continues for more than three months — because ordinarily, countries usually keep stock of supplies for three to five months.”

The timing of the Russian invasion is also bad news for Africa for another reason. That is due to the fact that there is currently a severe drought affecting the eastern subregion of the continent.

“Food prices are already high now,” he explained. “If the war stretches, there will be millions of Africans that will be in hunger. We are already expecting millions of people to be in hunger in the areas affected by the drought, so the ongoing conflict will worsen that.”

Outsider.com