Trade

After the sharp rise in international prices of wheat and other staple foods in the wake of Russia’s February invasion of Ukraine, since May prices have fallen back to pre-war levels. Has the global food price crisis now come to an end? Unfortunately, such a conclusion is premature. Domestic food prices for consumers continue to rise in most countries. Meanwhile, ongoing uncertainties—not the least of which is the continuing war—augur for continued turmoil in global food markets.

For the fourth consecutive year, global acute food insecurity rose in 2022. As many as 205.1 million people across 45 countries and territories are in IPC Phase 3 (Crisis) or higher food insecurity as of September 2022, according to the Global Report on Food Crisis Mid-Year Update. That represents an increase of 29.5 million people from 2021.

On July 22, Ukraine and Russia reached an agreement to allow exports of grain and other agricultural products to resume from selected Ukraine Black Sea ports after months of Russian blockade. The agreement comes at a time when storage capacity is reaching its limits, with the much of the 2022 wheat harvest and the approximately 20 million metric tons of grains and oilseeds harvested in 2021 remaining in storage—unable to ship because of the blockade.

Marking the third consecutive monthly decline, the FAO Food Price Index fell 2.3 percent in June 2022 from the previous month, driven by declines in vegetable oils, sugar, and cereal prices while meat and dairy prices rose. Despite this continued decline, the index is still 23.1 percent above June 2021 levels.

In May, the FAO Food Price Index declined by 0.6 percent from the previous month, driven by the drop in vegetable oils, sugar and dairy prices, while meat and cereal prices rose. The Index is still 22.8 percent above May 2021 levels.