In its latest food security update, the World Bank has highlighted the enduring challenge of high domestic food price inflation across many impoverished nations like Ghana.
The report indicated that more than 5% inflation rates persist in 57.9% of low-income countries, marking a slight decrease of 5.3 percentage points since the previous update on February 1, 2024. Similarly, 71.7% of lower-middle-income countries experience such inflation, reflecting a 2.2 percentage point reduction, while there has been no change in 48% of upper-middle-income countries and a 1.1 percentage point increase in 45.5% of high-income countries.
Comparing data since the February 1 update, the World Bank notes a 3% rise in agriculture and a 10% surge in export price indices, with a contrasting 2% decline in the cereal price index. This increase in export prices is attributed to significant hikes in cocoa and cotton prices by 22% and 8%, respectively.
Examining cereals individually, maize and wheat prices have decreased by 3% and 1%, respectively, whereas rice prices have remained stable compared to two weeks prior. Year-on-year analysis reveals a substantial 35% drop in maize prices and a 21% decline in wheat prices, while rice prices have surged by 26%. Furthermore, in comparison to January 2020, maize prices have escalated by 12%, wheat prices by 6%, and rice prices by a notable 51%.
The February 2024 Agricultural Market Information System (AMIS) Market Monitor highlights that in early 2024, global commodity markets have maintained relative stability, with wheat, maize, and soybean export prices hitting their lowest in two years, although rice prices are almost one-third higher than a year ago because of El Niño-induced production shortfalls and export restrictions imposed by India. Concerns have arisen over Brazil’s soybean production, with below-normal rainfall stressing crops.
Also, shipping disruptions have significantly affected global trade flows, particularly in key maritime chokepoints such as the Panama Canal and the Red Sea. These disruptions have not only increased shipping costs but also delayed deliveries and affected global value chains, posing challenges to industries reliant on timely shipments.
Concerns About the Potential Long-Term Effects
Moreover, there are concerns about the potential long-term effects on trade costs, greenhouse gas emissions, and agricultural sector sustainability. The 2023 Financing Flows and Food Crises report, developed by the Global Network Against Food Crises, underscores the significant external financing that countries and territories facing food crises have received.
Over the past seven years, these areas have received three-quarters of global humanitarian allocations and almost one-third of global development allocations. Despite these substantial investments, the report highlights a failure to address acute food insecurity.
In 2022, despite a seven-year high in allocations to food sectors, acute food insecurity levels peaked at an all-time high, with 258 million people facing crisis or worse conditions in 58 countries and territories. The report calls for greater coherence between humanitarian and development financing to address the root causes of acute food insecurity and reduce humanitarian needs in the long term.
Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. 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 now, 16 countries have implemented 23 food export bans, and 8 have implemented 15 export-limiting measures.
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