Supply chain disruptions due to COVID-19 and increased consumer demand for food drastically raised food prices across the globe – exacerbating the severity of food insecurity for 821 million hungry people in low-income countries who already spend most of their income on food
World food prices increased for ninth straight month in February hitting their highest value since July 2014, according to U.N. Food and Agriculture Organization (FAO) and rose by close to 20% in the last year(January 2020-January 2021).
The economic downturn due to the COVID-19 affected the availability and affordability of nutritious-rich foods like eggs, fruits and vegetables 10 times more expensive than stable food like rice or wheat in sub-Saharan-Africa, vulnerable families in low-income countries turned to cheaper and less nutritious food to survive contributing to the rise in malnutrition and obesity.
Global food prices as measured by a World Bank food price index, rose 14% last year. Phone surveys conducted periodically by the World Bank in 45 countries. show significant percentages of people running out of food or reducing their consumption. With the situation increasingly dire, the international community can take three key action in 2021 to increase food security and help prevent a larger toll on human capital.
These changes have affected farmers’ prices as well – though mostly in the opposite direction. The market for foods primarily prepared and eaten in schools, restaurants, cruise ships, theme parks, and other commercial settings – think lobster, milk and cheese, and potatoes – evaporated overnight. Many farmers, ranchers, and fishermen had nowhere to sell their products, forcing some to bury surplus crops or dump milk. Even those who were lucky enough to find a market often sold at a loss because the sudden drop in demand dragged down prices.
food prices affect the incomes of farmers and other supply chain actors who make their living from selling food: falling food prices are good for net consumers of food but can cause real economic pain for net producers.