Rising Food Prices Deepen The Woes Of World’s Poorest

People buy and sell food at the Illaje market, in Bariga, Lagos, on June 29, 2021. Since the start of the pandemic in 2019, food prices have risen by an average of more than 22%, according to official statistics, and feeding a family properly has become a daily challenge. Benson Ibeabuchi / AFP

 

Global food prices are rising at their fastest rate in a decade, exacerbating the troubles of the world’s most vulnerable nations as they struggle with the fallout from the coronavirus pandemic.

The United Nations’ Food and Agriculture Organization (FAO) is worried that soaring prices could foment further social unrest in countries already mired in political turmoil.

Here is a look at the situation worldwide:

Where Are Food Prices Headed?

According to the FAO, food prices were nearly 40 percent higher in May than a year ago, the sharpest increase since September 2011.

On a 12-month basis, the price of corn has skyrocketed by 88 percent, soybean by 73 percent, grain and dairy products by 38 percent, sugar by 34 per cent and meat by 10 percent.

“Obviously, it’s very concerning,” said Arif Husain, chief economist of the World Food Programme.

In 2007-2008, brutal increases in the price of basic foodstuffs sparked riots in a number of cities around the world. Peaking in 2010-2011, the price rises acted as a harbinger for the Arab Spring uprisings.

What is driving the phenomenon?

The global economy is rebounding but inflation is also rising as governments have spent huge sums on stimulus programmes after the pandemic brought economic activity to a standstill last year.

China, which the World Bank projects will notch up growth of 8.5 percent in 2021, is gobbling up basic foodstuffs such as oilseed, cereals and meat.

“It really is China which is currently fuelling the surge in food prices,” said economist Philippe Chalmin.

The US economy is also expected to bounce back strongly, with the World Bank projecting a growth of 6.8 per cent this year.

But the economic recovery is “very uneven” across the world, with developing nations facing higher import bills while their income is not growing, said Josef Schmidhuber, deputy director of the FAO’s trade and markets division.

Other factors behind the surge in prices include a drought in Brazil, which is driving up corn prices, rebounding oil prices and an explosion in sea freight costs.

How long will it last? That is difficult to say.

For the moment, harvests are projected to be very good.

The US Department of Agriculture is forecasting record crop production for 2021-2022 and also record harvests of Brazilian soybean and American corn. If these materialise, that will help ease the price situation.

But climate conditions could be a wild card in such projections.

The FAO’s Schmidhuber believes that prices will remain relatively high this year, notably if oil prices go up as the agriculture sector consumes a lot of energy.

“If they rise, food prices will remain high for a long period of time”.

For FAO economist Abdolreza Abbassian, “the only thing we know is that the food market is going to be even more volatile in the future than it was in the past”.

What is the impact for poor countries?

In a range of countries currently facing other “shocks”, such as Covid-19, food price inflation currently stands at more than 20 percent, said WFP’s Arif Husain.

Lebanon is facing a grave financial and economic crisis that has sent its currency into tailspin and brought the country close to default. There, the rate of food price inflation stood at 226 percent on a 12-month basis in May, according to the website Trading Economics.

In Argentina, the government suspended beef imports for a month in mid-May as food price inflation skyrocketed.

According to the World Bank, high inflation in Nigeria, fuelled by sharp increases in foodstuff prices, has plunged another seven million people into poverty.

“Prices are going up, but at the same time people’s incomes are decimated because of Covid,” said WFP’s Husain.

“A poor person gets squeezed because prices go up and at the same time they have no money,” he said, pointing out that conflicts were the main cause of food insecurity.

Will it trigger social unrest?

FAO economist Abbassian said there was “no evidence that countries are any better prepared than they were 10 years ago” for such price volatility.

“More or less the same countries which were in the forefront of the riots and political instability 10 years ago, today can easily find themselves in exactly the same situation: waking up in the morning and find prices have gone up very rapidly,” the economist said.

However, unlike a decade ago, when rocketing food prices were clearly the main cause of social discontent, now they were “one along many other issues”.

Rich countries, Abbassian said, have to be “prepared for upheavals” in Africa, Latin America and Asia.

“Discontent is so widely spread now”.

For social unrest to erupt, “all you need is a little spark. It can be food prices, or energy prices, or simply bad rain.”

Bad Weather Helps To Push World Food Prices To Six-Year High – UN

Volunteers prepare food packages to be distributed to people in need at the Zaqueo Association in Palma de Mallorca on December 2, 2020. JAIME REINA / AFP
Volunteers prepare food packages to be distributed to people in need at the Zaqueo Association in Palma de Mallorca on December 2, 2020.
JAIME REINA / AFP

 

Global food commodity prices rose sharply in November to their highest level in nearly six years, the UN food agency said Thursday, due in part to adverse weather conditions.

The Food and Agriculture Organisation (FAO) said prices of the most globally traded foodstuffs were up across the board, putting extra pressure in particular on 45 countries that need outside help feeding their populations.

The FAO Food Price Index averaged 105 points during the month, up 3.9 percent from October and 6.5 percent from a year earlier.

“The monthly increase was the sharpest since July 2012, putting the index at its highest level since December 2014,” the Rome-based agency said.

The biggest rise was in the vegetable oil price index, which jumped 14.5 percent because of low palm oil stocks.

The cereal price index rose 2.5 percent from October — making it nearly 20 percent higher than a year ago.

Wheat export prices were also up, because of reduced harvest prospects in Argentina, as were maize prices, with lower output expectations in the US and Ukraine and large purchases by China, the FAO said.

The sugar price index was up 3.3 percent month-on-month amid “growing expectations of a global production shortfall” as bad weather sparked weaker crop prospects in the EU, Russia and Thailand.

Dairy prices also rose 0.9 percent to near an 18-month high, in part because of a boom in sales in Europe. Meat prices were up 0.9 percent from October, but significantly down on a year ago, the report said.

The increase in prices is an extra burden for those who saw their income fall as a result of the coronavirus pandemic, which the FAO said is proving to be “an important driver of the levels of global food insecurity”.

“The pandemic is exacerbating and intensifying already fragile conditions caused by conflicts, pests and weather shocks, including recent hurricanes in Central America and floods in Africa,” it said.

“Forty-five countries, 34 of them in Africa, continue to be in need of external assistance for food,” it said.

What is more, it noted a risk of above-average rainfall in southern Africa and East Asia, while parts of Near East Asia and East Africa were expecting reduced rains, “conditions that may result in adverse production shocks”.

 

AFP

Inflation Soars To 99% In Sudan As Food Prices Rise

A kitchen worker prepares hot meals at Thava Indian restaurant, at The Gardens, for the daily food distribution in an informal settlement in Tembisa, Johannesburg, on April 24, 2020.  Luca Sola / AFP
PHOTO USED TO ILLUSTRATE STORY: A kitchen worker prepares hot meals at Thava Indian restaurant, at The Gardens, for the daily food distribution in an informal settlement in Tembisa, Johannesburg, on April 24, 2020. Luca Sola / AFP

 

Inflation in Sudan jumped to 99 percent because of rising food prices, official figures showed Saturday, more than a year after the country was rocked by protests sparked by bread price hikes.

The inflation rate in April shot up from 82 percent the previous month due to increased prices of grains, meat, milk and bread, according to the Sudanese Central Bureau of Statistics.

Despite Sudan’s political transition, which has raised hopes of more reforms, the economy remains in deep crisis.

Soaring inflation, a scarcity of foreign currency and a huge public debt are among the country’s most pressing challenges.

Many in Sudan still have to queue for hours to buy bread.

A tripling of the price of bread was the trigger for the first street protests against long-time autocrat Omar al-Bashir in December 2018.

The mass demonstrations went on for months before the army deposed Bashir on April 11, 2019.

Last month, Sudanese authorities announced an increase in bread prices, meaning one Sudanese pound (about two US cents) now buys only a 50-gram loaf of bread, compared to one weighing 70 grams previously.

Government Policies Are Responsible For Food Crisis- Anogwi Anyanwu

Food Crisis, Anogwi AnyanwuEconomic Consultant, Anogwi Anyanwu, has attributed the hike in food prices in Nigeria to weak government policies.

According to him, the issue of food price hike has nothing to do with a 5% interest rate in the agriculture sector, rather it has so much to do with government policies.

“What is causing food crisis is government policies and the inability of the government to have a unified plan on how to manage the increasing prices of food stuff.

He stated this while speaking on Channels Television’s Breakfast show, Sunrise Daily.

Anyanwu, who is also the Former Executive Director of Spring Bank, however commended the Federal Government over the mandate given to the food task force which was set up Wednesday.

The committee, set up to reduce food prices in the country, is expected to report their findings to the council within the next one week.

“I want to commend the Federal Executive Council for talking about the rising prices of foodstuff; at least that shows that they are feeling what the people are feeling.”

He, however said he hopes that the move is not just a political action, intended to make the people feel like the government cares whereas, they end up not really doing anything.

According to him. “What they have set out to do, is not something you can do in one week”.

Recalling the increase in food prices between the year 2007 and 2008, he said because Nigeria was a net importer of food, commodity prices including oil prices went up significantly.

Furthermore, he stated that: “the government at that time was scared that there was going to be a food crisis and several hearings were held by the Senate as well as the Federal House of Representatives.

“The Federal Ministry of Agriculture and Water Resources at that time, held several seminars, the President at that time, had meetings with the 36 state governors and all of them were talking about how to avert a food crisis.”

According to him, in 2009, “the government came up with a strategy document of food security. That document was dusted up in 2011 when the last administration came in.

“The Minister of Agriculture at that time, came up with the Agric Transformation Agenda which had several components including the growth enhancement scheme, including the seed scheme that gave farmers improved seedlings, including the plans to build rice mills and silos all over the country.

“I don’t know the impact of this, I don’t know whether they had been continued or those programmes had been abandoned.

This led him to speak about long term plans as regards the new task force.

“When speaking of food security, there are long term, medium and short term measures.

“The government cannot legislate the prices of food or any commodity for that matter. Government can only take action that makes the forces of demand and supply to have an appropriate pricing for anything including foodstuff.”

Certificate of Occupancy

Debunking comments that the financial world is making it difficult for farmers to survive, Mr Anyanwu said that the issue is not the fault of the financial world.

Defending his claim, he said: “There are several progammes such as the Agric Credit Guarantee Scheme, the Growth Enhancement Scheme and the fertilizer scheme, whereby government ensured that the fertiliser subsidy was going directly to farmers.

“I do not think that the banks would frustrate any programme that is meant to improve the economy of this country.”

According to him, “the banks play leading roles and the even in the growth enhancement scheme, the banks came together and provided 200bn Naira for lending to farmers.

He however added that “the bank will not lend to the small scale farmer – the bank would lend to a farmer that is properly structured, that has documents that he can present as collateral.

“If you own a farm and you don’t have a Certificate of Occupancy (CoO), what are you going to present to the bank to loan you money,” he questioned.

“The small scale farmers are supposed to be taken care of by the government. If the small scale farmers have cooperatives and they come together, then the bank can deal with them as a cooperative not individuals.”