1062. Four Insights on Global Food Price Trends and Food Security 

On July 11, the World Bank published four insights on global food price trends and food security since the COVID-19 pandemic in a blog post.

Global food prices spiked following COVID-19 but have fallen since their peak in 2022.
In 2020, supply chain disruptions and distribution bottlenecks caused by the pandemic led to an increase in global food prices, and in the first half of 2022, grain and food and oil prices hit historic highs due to export bans by agricultural exporters in the wake of Russia's invasion of Ukraine at the end of February 2022. In mid-2022, prices stabilized due to the resumption of exports from Ukraine, but remained higher than pre-pandemic levels until mid-2023. Since then, global food prices have taken a downward trend and are expected to fall further over the course of 2024–2025.

Food prices remain high globally.
Fluctuations in international food prices due to supply chain disruptions and geopolitical tensions have a serious impact on the domestic markets of each country. In addition to rising import costs, the depreciation of currencies is accelerating inflationary pressures, especially in countries that are overly dependent on imported food. In addition, the asymmetrical transmission of phenomena such as international prices and extreme weather events at the local level complicates domestic price movements. Fertilizer prices, which had been on an upward trend since the end of 2020 due to a combination of factors such as energy prices and supply chain bottlenecks, have risen sharply due to the war in Ukraine and emerged as a driver of inflation. Since the second half of 2022, fertilizer prices have remained elevated, albeit stabilized, and remain a factor in inflationary pressures. In addition, wage inflation in advanced economies is driving up domestic food prices. While domestic food prices have declined since peaking in 2022, they have generally exceeded pre-pandemic levels, with food price inflation remaining in double digits in many countries, with the exception of East Asia, the Pacific and South Asia.

Assessing price impacts on vulnerable households is becoming more challenging.
Understanding global inflation trends poses challenges, especially when it comes to food security and assessing situations in conflict zones where data is difficult to obtain. Traditionally used measures of inflation, such as the Consumer Price Index (CPI) and other indicators that focus specifically on food prices, also focus primarily on urban areas and have limited ability at capturing local prices in conflict-affected areas. In addition, the indicators themselves do not reflect the diverse adaptation strategies of households in the face of rising food prices, and they tend to fail to capture changes in the availability and quality of staple foods in times of crisis.

New AI tools are helping provide more granular data in real-time.
In light of these challenges, the World Bank is implementing new machine learning techniques in 36 countries to improve the accuracy and timeliness of data. For example, in Yemen, we provide real-time price (RTP) data to support UN agencies and other organizations in monitoring food security risks at the local level, taking into account fuel prices, exchange rates, and food price shocks. RTP data will be available for download and will be made accessible to project stakeholders.

Contributor: IIYAMA Miyuki, Information Program