Food prices

Food prices refer to the (averaged) price level for food in particular countries or regions or on a global scale. The food industry's contribution to the price levels and fluctuations come from the food production process, food marketing and food distribution. Source of uncontrollable price fluctuations are varying crop yield from excess supply to harvest failure and food speculation activities. It is speculated that already the global climate change could be a major factor behind rising food prices.[1] A continuing drought in South Africa[2] may - amongst other factors - have food inflation soar 11% until end of 2016 according to the South African Reserve Bank.[3] To a certain extent, adverse price trends can be counteracted by food politics. When food commodities become too expensive on the world market, food security is in danger especially for developing countries. In keeping with the supply and demand-principle, global prices will on average continue to rise with the growing world population.

Global differences [ edit ]

The price of food has risen quite drastically since the 2007-08 world food price crisis, and has been most noticeable in developing countries while less so in the OECD countries and North America.[4][5]

Consumer prices in the rich countries are massively influenced by the power of discount stores and constitute only a small part of the entire cost of living. In particular, Western pattern diet constituents like those that are processed by fast food chains are comparatively cheap in the Western hemisphere. Profits rely primarily on quantity (see mass production), less than high-price quality. For some product classes like dairy or meat, overproduction has twisted the price relations in a way utterly unknown in underdeveloped countries ("butter mountain"). The situation for poor societies is worsened by certain free trade agreements that allow easier export of food in the "southern" direction than vice versa. A striking example can be found in tomato exports from Italy to Ghana by virtue of the Economic Partnership Agreements where the artificially cheap vegetables play a significant role in the destruction of indigenous agriculture and a corresponding further decline in the already ailing economic power.[6][7]

Data sources [ edit ]

Numbeo [ edit ]

The Numbeo database "allows you to see, share and compare information about food prices worldwide and gives estimation of minimum money needed for food per person per day".[8]

FAO food price index [ edit ]

Annual real food price indices. The peaks in 2008 and 2011 indicate global food crises

The FAO food price index is a measure of the monthly change in international prices of a market basket of food commodities. It consists of the average of five commodity group price indices, weighted with the average export shares of each of the groups for 2002-2004:[9]

  1. FAO Cereal price index
  2. FAO Vegetable oil price index
  3. FAO Dairy price index
  4. FAO Meat price index
  5. FAO Sugar Price index
Year nominal price idx deflated price idx
1990 107.2 100.4
1991 105.0 98.7
1992 109.2 101.1
1993 105.5 97.1
1994 110.3 101.3
1995 125.3 105.3
1996 131.1 113.7
1997 120.3 111.3
1998 108.6 105.6
1999 93.2 92.6
2000 91.1 92.4
2001 94.6 101.0
2002 89.6 96.2
2003 97.7 98.1
2004 112.7 105.0
2005 118.0 106.8
2006 127.2 112.7
2007 161.4 134.6
2008 201.4 155.7
2009 160.3 132.8
2010 188.0 150.7
2011 229.9 169.1
2012 213.3 158.8
2013 209.8 158.5
2014 201.8 152.0
2015 164.0 123.2
2016 151.6 112.3

World bank food price watch [ edit ]

The World Bank releases the quarterly Food Price Watch report which highlights trends in domestic food prices in low- and middle-income countries, and outlines the (food) policy implications of food price fluctuations.[10]

Grocery Foods Economics [ edit ]

In the long term, prices are expected to stabilize.[11] Farmers will grow more grain for both fuel and food and eventually bring prices down.[11] This has already occurred with wheat,[12][13] with more crops planted in the United States, Canada, and Europe in 2009. However, the Food and Agriculture Organization projects that consumers still have to deal with more expensive food until at least 2018.[11]

It is rare for the spikes to hit all major foods in most countries at once. Food prices rose 4% in the United States in 2007, the highest increase since 1990, and are expected to climb as much again in 2008. As of December 2007, 37 countries faced food crises, and 20 had imposed some sort of food-price controls. In China, the price of pork jumped 58% in 2007. In the 1980s and 1990s, farm subsidies and support programs allowed major grain exporting countries to hold large surpluses which could be tapped during food shortages to keep prices down. However, new trade policies have made agricultural production much more responsive to market demands, putting global food reserves at their lowest since 1983.[11]

Food prices are rising, wealthier Asian consumers are westernizing their diets, and farmers and nations of the third world are struggling to keep up the pace. Asian nations have contributed at a more rapid growth rate in the past five years to the global fluid and powdered milk manufacturing industry. In 2008, this accounted for more than 30% of production with China accounting for more than 10% of both production and consumption in the global fruit and vegetable processing and preserving industry. The trend is similarly evident in industries such as soft drink and bottled water manufacturing, as well as global cocoa, chocolate, and sugar confectionery manufacturing, forecast to grow by 5.7% and 10.0% respectively during 2008 in response to soaring demand in Chinese and Southeast Asian markets.

Rising food prices over recent years have been linked with social unrest around the world, including rioting in Bangladesh and Mexico,[14] and the Arab Spring.[15]

Fluctuating food prices have led to some initiative in the industrialized world as well. In Canada, Dalhousie University and the University of Guelph publish Canada's Food Price Report every year, since 2010. Read by millions of people every year, the report monitors and forecasts food prices for the coming year.[16] The report was created by Canadian researchers Sylvain Charlebois and Francis Tapon.

In 2013, Overseas Development Institute researchers showed that rice has more than doubled in price since 2000, rising by 120% in real terms. This was as a result of shifts in trade policy and restocking by major producers. More fundamental drivers of increased prices are the higher costs of fertiliser, diesel and labour. Parts of Asia see rural wages rise with potential large benefits for the 1.3 billion (2008 estimate) of Asia's poor in reducing the poverty they face. However, this negatively impacts more vulnerable groups who don't share in the economic boom, especially in Asian and African coastal cities. The researchers said the threat means social-protection policies are needed to guard against price shocks. The research proposed that in the longer run, the rises present opportunities to export for Western African farmers with high potential for rice production to replace imports with domestic production.[17]

See also [ edit ]

References [ edit ]

  1. ^ "Climate Change: The Unseen Force Behind Rising Food Prices?". World Watch Institute. 2013. Archived from the original on 17 July 2018. Retrieved 7 June 2016.
  2. ^ "SA drought persists despite May rainfall". 30 May 2016. Retrieved 16 June 2016.
  3. ^ Thandi Skade (29 March 2016). "SA's ticking food price bomb". Destiny Man. Archived from the original on 11 July 2017. Retrieved 9 June 2016.
  4. ^ "Consumer food-price inflation". The Economist. 19 July 2014.
  5. ^ "FAO Global and regional consumer food inflation monitoring". FAO.
  6. ^ Krupa, Matthias; Lobenstein, Caterina (30 December 2015). "Afrika: Ein Mann pflückt gegen Europa". Retrieved 16 June 2016 – via Die Zeit.
  7. ^
  8. ^ "Numbeo is the world's largest database about food prices worldwide". Retrieved 6 June 2016.
  9. ^ "FAO Food Price Index". FAO. Retrieved 6 June 2016.
  10. ^ "Food Price Watch". Retrieved 16 June 2016.
  11. ^ a b c d "Food prices rising across the world", CNN. 24 March 2008
  12. ^ Kimball, Jack (7 August 2009). "World food prices stabilize, no drop in sight: WFP". Reuters. Retrieved 6 March 2015.
  13. ^ "Inflation slows in Feb. as food prices stabilize". GMA News. 5 March 2010. Retrieved 6 March 2015.
  14. ^ "The real hunger games: How banks gamble on food prices – and the poor lose out". The Independent. Retrieved 1 April 2012.
  15. ^ "Let them eat baklava". The Economist. 17 March 2012. ISSN 0013-0613. Retrieved 21 December 2018.
  16. ^ "Canada's Food Price Report 2019". Dalhousie University.
  17. ^ "The end of cheap rice: a cause for celebration?". Overseas Development Institute. Archived from the original on 19 June 2014. Retrieved 6 March 2015.

Literature [ edit ]

External links [ edit ]

What is this?