UN: Global food prices highest in almost a decade
Global food prices have hit their highest levels in almost a decade, sparking concern about swelling grocery bills as the global economy continues to recover from the downturn caused by the COVID-19 pandemic.
Bloomberg reported Thursday that a United Nations gauge of world food costs increased for the 12th consecutive month in May, which is its longest run in a decade.
The United Nations’s world food price index is at its highest level since September 2011, according to Bloomberg. Last month’s gain of 4.8 percent was reportedly the largest recorded in more than 10 years.
The prolonged increase, Bloomberg noted, risks advancing broader inflation, which would in turn complicate central banks’ efforts to supply additional stimulus.
Droughts in areas in Brazil are hurting crops, including corn and coffee, and vegetable oil production growth has been limited in Southeast Asia, according to Bloomberg. As a result, costs for livestock producers are increasing.
Additionally, the slowed production of crops and oil risks straining global grain stockpiles, which have already been exhausted due to a spike in Chinese demand, even more, Bloomberg reported.
A senior economist at the U.N.’s Food and Agriculture Organization told Bloomberg that there is “little room for any production shock.”
“We have very little room for any unexpected surge in demand in any country,” Abdolreza Abbassian continued.
“Any of those things could push prices up further than they are now, and then we could start getting worried,” he added.
Abbassian added that the gains in the past year were perpetrated by China’s “unpredictably huge” purchases of foreign grain, according to Bloomberg.
The rally in prices of major commodities are seen in grocery stores, with countries including Kenya and Mexico reporting inflated food costs, according to Bloomberg.
The effects, Bloomberg noted, can be especially noticeable in some of the poorest import-dependent countries, which have restricted purchasing power and social safety nets amid the coronavirus pandemic.