Global food prices soared almost 33% in September 2021 compared to the same period the year before. This is according to the monthly food price index of the Food and Agriculture Organization of the United Nations (FAO), which also found that world prices have increased by more than 3% since July, reaching levels never seen since 2011.
The Food Price Index is designed to capture the combined results of changes in a range of food products, including vegetable oils, grains, meat and sugar, and compare them from month to month. It converts actual prices into an index, relative to average price levels between 2002 and 2004. This is the standard source for tracking food prices – nominal prices, as they are called, which means that they are not adjusted for inflation.
While nominal prices tell us the monetary cost of buying food in the market, inflation-adjusted prices (what economists call “real” prices) are much more relevant to food security – the ease with which people can access appropriate nutrition. The prices of all goods and services tend to increase faster than average incomes (but not always). Inflation means that not only do buyers have to pay more per unit for food (due to the increase in its nominal price), but they also have proportionately less money to spend, given the parallel price increases. everything else except their wages and other income. .
In August, I analyzed the FAO food price index, adjusted for inflation, and found that real food prices in the world were in fact higher than they were. 2011, when the food riots contributed to the overthrow of governments in Libya and Egypt.
Based on actual prices, it is currently more difficult to buy food on the international market than almost every two years since UN record keeping began in 1961. The only exceptions are 1974 and 1975 These food price spikes took place after the 1973 oil price spike, which led to rapid inflation in many sectors of the world economy, including food production and distribution.
So what is it that is now pushing food prices to historic highs?
The drivers of average international food prices are always complicated. The prices of different commodities go up and down based on universal factors, as well as those specific to each product and region.
For example, the rise in oil prices that started in April 2020 has affected the prices of all food products in the FAO index, increasing the costs of producing and transporting food. Labor shortages resulting from the COVID pandemic have reduced the availability of workers to grow, harvest, process and distribute food, another universal cause of rising commodity prices.
The real average price of food has in fact been increasing since 2000, reversing the previous trend of steadily declining since the early 1960s. Despite global efforts – which have, in part, met the targets set in the times by the United Nations Millennium Development Goals and subsequent Sustainable Development Goals to reduce hunger – prices have made food less and less accessible.
No commodity has been continuously responsible for the average rise in real prices from 2000 onwards. But the edible oilseed crop price index has increased significantly since March 2020, mainly due to the increase in the price of vegetable oils. by 16.9% between 2019 and 2020. According to FAO crop reports, this was due to increasing demand for biodiesel and adverse weather conditions.
The other food category that contributes the most to the global rise in food prices is sugar. Here again, unfavorable weather conditions, including frost damage in Brazil, reduced supply and inflated prices.
Cereals have contributed less to the overall price increase, but their accessibility around the world is particularly important for food security. Wheat, barley, maize, sorghum and rice account for at least 50% of the world’s nutrition and up to 80% in the poorest countries. Global buffer stocks of these crops have been declining since 2017 as demand outstrips supply. The store closures helped stabilize global markets, but prices rose sharply from 2019.
Again, the reasons for individual fluctuations are complicated. But something that deserves attention is the number of times since 2000 “unpredictable” and “adverse weather conditions” have been reported by FAO as having caused “reduced harvest forecasts”, “unscheduled harvests”. and a “drop in production”.
Europeans could worry about the price of pasta as Canadian droughts reduce wheat crops. But, as the real grain price index reaches levels that turned bread price riots into general uprisings in 2011, there is an urgent need to examine how communities in poorer regions can overcome these tensions and avoid troubles.
Our technological capacity and socio-economic organization cannot successfully cope with unpredictable and adverse weather conditions. Now would be a good time to imagine the food supply in a warmer world by more than 2 ° C – an outcome now seen as increasingly likely according to the most recent report of the Intergovernmental Panel on the Evolution of the World. weather.
Without radical changes, climate degradation will continue to reduce international access to imported food, far beyond any historical precedent. Higher prices will reduce food security, and if there is a strong social science law, it is that hungry people take drastic measures to secure their livelihoods, especially when leaders are perceived to have failed.
Alastair Smith is a senior researcher in global sustainability at the University of Warwick.