Food prices set global inflation loose, raising security concern

By ONOME AMUGE.

Domestic food prices maintained an upward trajectory, marked by high inflation figures around the world as geopolitical risks, high energy costs, poor weather in production regions continue to impact food prices, according to the World Bank food security update.

Information from the latest month between February 2023 and May 2023 for which food price inflation data are available shows high inflation in most low and middle-income countries, with

inflation levels higher than five per cent in 61.1 per cent of low-income countries and in 79.1 per cent of lower-middle-income countries. Inflation rate is also above five per cent in 70 per cent of upper-middle-income countries some of which are experiencing double-digit inflation,the report stated.

The World Bank observed that about 78.9 per cent of high-income countries are experiencing high food price inflation. It further noted that the countries affected most are in Africa, North America, Latin America, South Asia, Europe, and Central Asia.

In real terms, food price inflation exceeded overall inflation in 79.8 per cent of the 163 countries where data is available.

According to the food security update, Russia’s lingering war against Ukraine has resulted in an increase of trade-related policies imposed by several countries as part of food sustainability measures against supply risks.

“The global food crisis has been partially made worse by the growing number of food trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices. As of June 5, 2023, twenty countries have implemented 27 food export bans, and 10 have implemented 14 export-limiting measures,” it stated.

As part of its global response to the food security crisis, the World Bank announced in April 2022 that it would provide up to $30 billion over 15 months, including $12 billion in new projects.

The international financial institution explained  that the financing is to scale up short-term and long-term responses along four themes to boost food and nutrition security, reduce risks, and strengthen food systems. It noted that this will be done by supporting producers and consumers, facilitating increased trade in food and trade inputs, supporting vulnerable households, and investing in sustainable food and nutrition security.

According to the World Bank, between April and December 2022, its food and nutrition security commitments in new lending passed the $12 billion mark with almost half of this for Africa, which is one of the regions hardest-hit by the food crisis.  It also noted that  it is boosting adaptation capacity of agriculture system actors, and investing in regional food market integration and trade to increase food security.

“Some examples include the $766-million West Africa Food Systems Resilience Programme which is working to increase preparedness against food insecurity and improve the resilience of food systems in West Africa.The programme is increasing digital advisory services for agriculture and food crisis prevention and management,” it stated.

In May 2023, the World Bank Group and the G7 presidency, comprising leaders of France,United States,United Kingdom,Germany,Italy and Canada, co-convened the Global Alliance for Food Security, which aims to catalyse an immediate and concerted response to the unfolding global hunger crisis.

The World Bank noted that the alliance has developed the publicly accessible Global Food and Nutrition Security dashboard, which provides timely information for global and local decision makers to help improve coordination of the policy and financial response to the food crisis.

Meanwhile, the Food and Agriculture Organisation (FAO), International Monetary Fund (IMF) and the World Trade Organisation released a joint statement which called for urgent actions to prevent a worsening of the global food and nutrition security crisis.

The statement encouraged countries to balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.

World leaders were also urged to rescue hunger hotspots; facilitate trade improve the functioning of markets,and enhance the role of the private sector; and reform and repurpose harmful subsidies with careful targeting and efficiency.