The World Bank has released a food security progress report on its website, highlighting the persistent issue of high domestic food price inflation globally. According to the latest data from February to May 2023, many low- and middle-income countries are experiencing soaring inflation rates. Shockingly, inflation surpassed 5% in 63.2% of low-income countries, 79.5% of lower-middle-income countries, and 67% of upper-middle-income countries, with some nations facing inflation rates in the double digits.
Even high-income countries have not been spared from the impact of rising food prices, as 78.9% of them are also grappling with high inflation rates. The most affected regions are Africa, North America, Latin America, South Asia, Europe, and Central Asia. In 80.1% of the 166 countries for which the World Bank has access to data, food price inflation has outpaced overall inflation in real terms.
The World Bank’s report at the end of July revealed that agricultural, export, and grain price indices climbed by 6%, 4%, and 10%, respectively, with corn and wheat prices witnessing significant increases of 12% and 14%. Conversely, rice prices remained stable during this period.
However, a yearly comparison showed that corn and wheat prices had fallen by 15% and 17%, respectively, while rice prices rose by 16%. Additionally, compared to January 2021, corn, wheat, and rice prices had risen by 8%, 11%, and 3%, respectively.
The global grain market faced uncertainty when Russia announced its decision not to renew the Black Sea Grain Initiative (BSGI) on July 17, 2023, due to geopolitical tensions. As a result, the market did not react as anticipated, with only slight increases observed in the prices of major grain and oilseed futures contracts. Although wheat futures rose by 3%, they still remained well below the highs seen in the previous year. Corn and soybean futures also rose initially before stabilizing at pre-announcement levels.
India, on the other hand, took measures to tackle its own rising food prices by announcing a ban on exports of non-basmati white rice on July 19. This decision aimed to ensure sufficient rice supply within the country at an affordable price. However, such actions have had an adverse effect on the global rice market. Since India is the world’s largest rice exporter, accounting for nearly 40% of the total, this ban has significantly increased global rice prices and caused price fluctuations.
The State of Food Insecurity and Nutrition report by the Food and Agriculture Organization of the United Nations (FAO) for 2023 reveals a worrying trend. Global hunger rates have remained relatively unchanged between 2021 and 2022, but there has been a substantial increase from pre-COVID-19 levels. In 2022, an estimated 9.2% of the world’s population faced famine, compared to 7.9% in 2019.
The World Bank’s report underscores the pressing need for international efforts to address the issue of high domestic food inflation, ensuring food security for vulnerable populations worldwide. Without concerted action, the global hunger crisis could exacerbate further, impacting millions of lives. Policymakers, governments, and international organizations must collaborate to implement sustainable solutions and safeguard the well-being of communities around the world.