The International Monetary Fund (IMF) has stated that despite reaching a record high in February 2022, food prices are expected to continue rising globally.
The world body issued a blog post yesterday warning that the upcoming food crisis, which is being caused by Russia’s invasion of Ukraine, will disproportionately affect the world’s poorest countries.
It further stated that the “heaviest burden on vulnerable populations while adding to headwinds for the global economic recovery” will result from the high cost of food.
According to inflation-adjusted data from the United Nations Food and Agriculture Organization, food commodity prices increased 23.1% last year, the fastest rate in over ten years.
The gauge that tracks the prices of meat, dairy, grains, oils, and sugar reached its highest reading since 1961 in February.
“Now, shipments and possibly production for two of the world’s largest agricultural producers are being disrupted by the war in Ukraine and sanctions on Russia,” the organization stated.
The two nations export around 30% of the world’s wheat and 18% of its corn, the majority of which is transported via now-closed Black Sea ports. The global benchmark for wheat futures trading, Chicago, just reached a new high.
The Chart of the Week illustrates the global effects of price shocks, particularly on low-income households where food accounts for a larger portion of expenses.
In developed economies, food expenses make up 17% of consumer spending, whereas in sub-Saharan Africa, they make up 40%. Wheat merely makes up a small portion of the region’s total caloric demands, despite the fact that it is heavily imported.
