| 25 May 2024, Saturday |

Global food prices hit fresh 10-year high, UN says

According to the United Nations Food and Agriculture Organization (FAO), global food prices have reached their highest level in over a decade, having risen by more than 30% in the previous year.

The figures released by the agency highlighted the global rise in the price of cereals and vegetable oils.

After rising by nearly 10% in October, vegetable oil prices reached a new high.

Supply disruptions, high commodity prices, factory closures, and political tensions are all contributing to price increases.

The FAO reported that its cereal price index was up by more than 22% year on year.

Wheat prices were a major contributor to this increase, rising nearly 40% in the last year as major exporters such as Canada, Russia, and the United States experienced poor harvests.

“In the case of cereals, one could argue that climate change is ultimately causing falling production,” Peter Batt, an agribusiness expert at Curtin Business School, told the BBC.

“We’ve had a lot of bad years [in terms of harvests] in a lot of places.”

The FAO reported that increases in the cost of palm, soy, sunflower, and rapeseed oils pushed up its vegetable oil price index.

In the case of palm oil, prices have risen as output from Malaysia has been “subdued” due to migrant worker shortages, according to the FAO.

Labor shortages are also contributing to higher food production and transportation costs in other parts of the world.

Mr. Batt stated: “Another issue that has arisen is the distribution of the product. For example, here in Australia, many ships have arrived to take the food away, but we can’t get crew to come in because of Covid.”

Shipping disruptions are also driving up milk prices, with the cost of dairy products increasing by nearly 16% in the last year.

According to Brigit Busicchia of Macquarie University, speculation on global markets is also contributing to price volatility: “Since the 1990s, deregulation of commodity futures trading has allowed institutional investors to enter this market on a large scale.”

This has a particularly negative impact on countries that rely on food imports.

“Expect tensions in cereal provisioning in countries like Egypt or other Middle Eastern countries,” she said.

Busicchia also stated that rising food prices are often felt most acutely by the poor, as disadvantaged groups are pushed further into poverty, and that this has the potential to exacerbate social and political tensions.