News Food prices
Food prices will continue to rise in 2021
Global food prices reached a 6-year high in December, according to the Food and Agriculture Organization (FAO). This is due to the increased raw material prices, such as wheat, maize and soya. In addition, the FAO foresees that prices will continue to rise in 2021.
The United Nations food price index has risen by 2020% since May 18. In December, prices were even at their highest level in 6 years for that month. If we look at the annual average, food prices in 2020 will be at the second highest level ever. Only in 2 and 2008 did the index rise even higher. High prices threaten to cause food inflation in many countries, which is especially bad news for households whose incomes are severely affected by the corona crisis. The FAO therefore fears problems with the food supply, especially in the third world countries.
Higher prices expected
The fact that food is becoming more and more expensive all over the world is mainly due to rising raw material prices. For example, the prices of corn, soybeans and wheat all soared last month to their highest point since June 2014. This is the result of, among other things, uncertainty about the harvest. In South America, for example, the yield is threatened by the drought, while in Argentina a farmer's protest is causing uncertainties in exports.
In addition, Russia recently announced it would curb wheat and maize exports in order to limit the country's food inflation. As the above uncertainties persist for the time being, the FAO expects food prices to continue rising in the coming months.
Kimberly Baker
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