A United Nations food prices indicator has jumped 18 percent since May 2020. The spike resulted mainly from government measures to safeguard food supplies due to adverse weather and “robust demand” according to PressHerald.com. The increase helped fuel rallies across agricultural commodities. BloombergQuint.com reported prices are likely to continue rising in 2021. The rising price of food is expected to put increased stress on household’s finamces as world hunger increases.
In December 2020 the UN food and agriculture program reported that the world food price index rose to a six year high. It reached its biggest monthly increase since July 2012, according to a report from Newsonnews.org. The spike in food prices brings back memories of the food price crises that occurred over a decade ago; and threatens to push inflation higher. It will be harder for central banks to provide more stimulus to shore up economies according to the UN’s Food & Agriculture Organization.
The COVID-19 crisis adds to concerns about global food security. The COVID-19 pandemic effects food production, suppply, delivery and demand. The price of wheat was driven higher by planting and yields fluctuations amid fears of the recent dry weather. This could effect export prices that have been inched higher as a result of “reduced harvest prospects” in Argentina, NewsonNews.com reports. The Argentinean government recently suspended commodity export licenses and farmers are planning a protest strike. Russian wheat farmers plan to limit grain exports in response to food inflation.
According to Joe Stone, Cargill Inc.’s head of agriculture supply and corporate trading, soy prices have risen to the point of world ration. Drivers that may effect the price of soy and other food pricing include reduced harvest. weather, yield fluctuation, consumption, demand, and price increases.
