Global food prices near record high

Global food prices rose to a record last month, further driving up the rising cost of living for consumers.

The United Nations price index rose 1.1% in January, driven by higher prices for vegetable oils and dairy products. The indicator is approaching the all-time high of 2011 and both unfavorable weather conditions for crops and the consequences of an energy crisis threaten to keep prices high in the future.

Inflation has skyrocketed around the world, and the latest spike in the UN food index could put further strain on household budgets.

The commodities tracked by the indicator are used in most products that are purchased in grocery stores or fed to the animals from which those products are made. That’s particularly bad for the poorest consumers and nations with the least disposable income.

The “poorer segments of the population will feel the impact moreJosef Schmidhuber, deputy director for markets and trade at the Food and Agriculture Organization of the United Nations, said by phone.

“Big energy bills, big food bills, and big necessities — all of that makes up a big chunk of your overall expenses.”.

Sugar was the only basic product that fell in price during the month, while costs of meat, cereals, dairy products and vegetable oils increased. Countries from Turkey to Paraguay are facing food inflation.

Rising energy prices have increased the attractiveness of crop-based biofuels and raised the cost of fertilizers and fuel for farmers. That could force cuts in farm inputs, particularly in developing countries, which could increase reliance on crop imports if harvests fail, Schmidhuber said.

Crop supplies also face risks from bad weather and geopolitical tensions. A dry season has hit South American soybean fields, while palm oil prices hit a record high due to labor shortages and export restrictions.

The possibility of a conflict on the Ukrainian border also has the market attentive to any impact on grain shipments from the Black Sea.

For now, it is difficult for production to keep up with demand as economies recover from the pandemic, agricultural advisory firm Agritel said in a report this week.

“The runaway inflation started in energy and commodities and is now moving into consumer prices.” Indian. It’s something that “It is harming emerging countries, which are being left behind with deeper and more lasting consequences of the crisis”.