Why are food prices going up？ Key questions answered

div classBodysc17zpet90 cdBBJodivpCHICAGO Reuters – Why are food prices rising？ p

pGlobal food prices started to rise in mid2020 when businesses shut down due to the COVID19 pandemic, straining supply chains. Farmers dumped out milk and let fruits and vegetables rot due to a lack of available truckers to transport goods to supermarkets, where prices spiked as consumers stockpiled food. A shortage of migrant labor as lockdowns restricted movement impacted crops worldwide.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pSince then, there have been problems with key crops in many parts of the world. Brazil, the world‘s top soybean exporter, suffered from severe drought in 2021. China’s wheat crop has been among the worst ever this year. Concerns about food security, heightened during the pandemic, have led some countries to hoard staples to ward off future shortages, limiting supplies on the global market.p

pRussia‘s invasion of Ukraine in late February dramatically worsened the outlook for food prices. The U.N. food agency said prices hit an alltime record in February and again in March. Russia and Ukraine account for nearly a third of global wheat and barley, and twothirds of the world’s export of sunflower oil used for cooking. Ukraine is the world‘s No. 4 corn exporter. The conflict has damaged Ukraine’s ports and agricultural infrastructure and that is likely to limit the countrys agricultural production for years. p

pSome buyers are avoiding buying grains from Russia due to Western sanctions.p

pIndonesia banned most exports of palm oil in late April to ensure domestic supplies of cooking oil, cutting off supplies from the worlds largest producer of the edible oil used in everything from cakes to margarine.p

pWhat food prices are rising the most？ p

pThroughout the pandemic, high vegetable oil prices have helped drive up broader food costs. Cereal prices also hit a record in March, a result of limited shipments of corn and wheat during the Ukraine war.p

pDairy and meat prices reached a record in April, according to the U.N. food agency, reflecting continually increasing global demand for protein and high prices for animal feed – mainly corn and soybeans. In addition, bird flu in Europe and North America impacted egg and poultry prices.p

pIn U.S. inflation data for March, the index for meats, poultry, fish and eggs increased 14 from a year ago while beef rose 16.p

pWhen will food prices come down？ p

pIt is hard to say, given that agricultural production depends on hardtopredict factors like weather. U.N. SecretaryGeneral Antonio Guterres said in early May the problem of global food security could not be solved without restoring Ukrainian agricultural production and Russian food and fertilizer output to the world market.p

pThe World Bank forecasts wheat prices could rise more than 40 in 2022. The Bank expects agricultural prices to fall in 2023 versus 2022. But that depends on increased crop supplies from Argentina, Brazil and the United States – by no means guaranteed.p

pThe sharp rise in fertilizer prices, as countries avoid buying from major producers Russia and its ally Belarus, could discourage farmers from applying adequate crop nutrients to their fields. That could bring down yields and result in lower production, prolonging the crisis. As the climate warms, extreme weather is becoming more common – posing another risk to crop production.p

pWho is most affected？p

pFood prices in March accounted for the greatest share of U.S. inflation since 1981, according to Fitch Ratings, while shop prices in Britain surged in April at the fastest rate in more than a decade. But the people most impacted by higher food prices live in the developing world, where a larger percentage of incomes is spent on food.p

pThe Global Network Against Food Crises, set up by the United Nations and the European Union, said in an annual report that Russias invasion of Ukraine poses serious risks to global food security, especially in countries facing a food crisis including Afghanistan, Ethiopia, Haiti, Somalia, South Sudan, Syria and Yemen.p

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pp Reporting by Caroline Stauffer in Chicago Editing by Matthew Lewisp

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