WASHINGTON: Global food prices hit a multi-year high, linked to the COVID-19 pandemic supply chain disruption and rising transportation costs, international monetary fund (International Monetary Fund) said.
IMF’s Christian Bogmans, Andrea Pescottori and Ervin Prifti write in a new blog that international food prices are expected to rise by about 25 percent from 2020 to 2021. He is expected to stabilize by the end of this year.
The recent sharp rise in international food prices has begun to gradually feed domestic consumer prices in some regions as retailers, unable to absorb rising costs, pass on increases to consumers.
However, price of food Inflation had started rising before the pandemic. In the summer of 2018, China was hit by an outbreak of African swine fever, which wiped out most of China’s hog herd, which represents more than 50 percent of the world’s hogs.
This sent pork prices in China to an all-time high by mid-2019, causing a ripple effect on the prices of pork and other animal proteins in many regions around the world. This was further aggravated by the imposition of Chinese import duties on US pork and soybeans during the US-China trade dispute.
At the start of the pandemic, disruptions in the food supply chain, food services (such as dining out) toward retail grocery and consumer stockpiling (coupled with a sharp appreciation of the US dollar) pushed consumer food price indices in many countries.
Consumer food inflation peaked in April 2020, even as producer prices of primary goods, including food and energy, were declining sharply as demand for primary food items was disrupted.
However, in the early summer of 2020, various consumer food prices softened, leading to a moderation in consumer food inflation in many countries.
Also, IMF economists wrote, sea freight rates have increased two to three times over the past 12 months, while high petrol prices and truck driver shortages are driving up the cost of road transport services in some areas. Higher transportation costs will eventually drive up consumer food inflation.
From its trough in April 2020, international food prices have risen 47.2 per cent, reaching their highest level since 2014 in May 2021. Between May 2020 and May 2021, soybean and corn prices have risen by over 86 and 111 percent, respectively.
Finally, IMF economists wrote, an additional risk factor for emerging markets and developing economies is currency depreciation against the US dollar – possibly due to declining export and tourism revenues and net capital outflows.
Since most food items are traded in US dollars, countries with weaker currencies have seen their food import bills rise.
IMF’s Christian Bogmans, Andrea Pescottori and Ervin Prifti write in a new blog that international food prices are expected to rise by about 25 percent from 2020 to 2021. He is expected to stabilize by the end of this year.
The recent sharp rise in international food prices has begun to gradually feed domestic consumer prices in some regions as retailers, unable to absorb rising costs, pass on increases to consumers.
However, price of food Inflation had started rising before the pandemic. In the summer of 2018, China was hit by an outbreak of African swine fever, which wiped out most of China’s hog herd, which represents more than 50 percent of the world’s hogs.
This sent pork prices in China to an all-time high by mid-2019, causing a ripple effect on the prices of pork and other animal proteins in many regions around the world. This was further aggravated by the imposition of Chinese import duties on US pork and soybeans during the US-China trade dispute.
At the start of the pandemic, disruptions in the food supply chain, food services (such as dining out) toward retail grocery and consumer stockpiling (coupled with a sharp appreciation of the US dollar) pushed consumer food price indices in many countries.
Consumer food inflation peaked in April 2020, even as producer prices of primary goods, including food and energy, were declining sharply as demand for primary food items was disrupted.
However, in the early summer of 2020, various consumer food prices softened, leading to a moderation in consumer food inflation in many countries.
Also, IMF economists wrote, sea freight rates have increased two to three times over the past 12 months, while high petrol prices and truck driver shortages are driving up the cost of road transport services in some areas. Higher transportation costs will eventually drive up consumer food inflation.
From its trough in April 2020, international food prices have risen 47.2 per cent, reaching their highest level since 2014 in May 2021. Between May 2020 and May 2021, soybean and corn prices have risen by over 86 and 111 percent, respectively.
Finally, IMF economists wrote, an additional risk factor for emerging markets and developing economies is currency depreciation against the US dollar – possibly due to declining export and tourism revenues and net capital outflows.
Since most food items are traded in US dollars, countries with weaker currencies have seen their food import bills rise.
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