From the past few months, the food price index by Food and Agriculture has been showing some positive signs. If you look at the chart below you will see a considerable dip. After touching the highest since its inception, the FPI has finally started to converge with last year’s average. However, compared to 2020 or pre pandemic levels it still is on an elevated level.
Javier Blas has recently written a very interesting article about this recent fall in prices. However, higher energy prices and the dleay from “farm to fork” will keep prices elevated in supermarkets therefore, the final consumer will have to wait for some time to reap the benefits - this will not be happening before thanksgiving.
The FAO’s FPI is set to post its first percentage drop in two years. Here is an excerpt from the article that highlights drop in prices of various food items.
One of the most interesting points is that the price of rice has remained stable which is some way helped the world evade a full blown food crisis. For context the price of rice in 2007-08 went up to $1000 per ton compared to $414 per metric ton in 2022.
According to Blas, higher food prices have helped bring down higher food prices. Farmers increased production while the UN brokered Ukraine grain deal eased supply pressures. Most importantly there weren’t many export bans. Weather helped too (Australia got a bumper crop).
But a decrease in prices does not mean or equal to availability of food.
Recently the population of the world has reached 8 billion mark. This presents the policy makers of the world with all sorts of challenges, the biggest one being that of feeding the global population.
As a result of Covid-19 and ensuing inconsistencies in global supply chains, about 200 million more people suffer from food insecurity across the world than before. As per a report by the UN, food production has to increase 70 percent by 2050 to meet the food demand. This is problematic as food production already accounts for 90 percent of deforestation and a third of carbon emissions.
The amount of food that goes to waste is also appaling with a third of all produced food never being eaten. 14 percent is lost between harvest and retail and 17 percent in restaurants and shops.
Recently the global food import bill touched a record US$ 2 trillion as prices remained elevated from their average levels.
All in alll while the fall in food price index is a welcoming news, the overall structural issues remain. We need to address them in order to ensure that no one sleeps on a hungry stomach - trust me it ain’t a good feeling.