Food Prices

The FAO Food Price Index declined slightly in August due to falling sugar, meat, and cereal prices. The Index was just over 1 percent lower than its August 2023 value and nearly 25 percent below the peak reached in March 2022.

According to the Global Report on Food Crises (GRFC) Mid-Year Update, the number of people facing or expected to face IPC Phase 5 (Catastrophe/Famine) food insecurity more than doubled from 2023 to 2024: from just over 700,000 people to 1.9 million people in four countries/territories. This is the highest number ever recorded by GRFC reporting.

Declining cereal prices drove the FAO Food Price Index down slightly in July despite increasing vegetable oil, meat, and sugar prices. The Index was 3.1 percent lower than its July 2023 level and nearly 25 percent below the high seen in March 2022.

In 2022, Central America experienced significant surge in food prices, a trend that was evident in Honduras. The country saw  year-on-year monthly food inflation exceeding 12% from May 2022 to May 2023, with rates surpassing 17% in eight of those months. 

In the following lines, we address the underlying causes of the food and fertilizer price surges, and the actions that can be taken to mitigate this situation in Central America.

In July 2023, the Indian government announced export restrictions on non-basmati white rice. Coming after earlier export limits on other types of rice, the action was taken in part due to a strengthening El Niño that threatened to limit rice production and fuel rising food inflation—a potential political liability for the Modi government as it faced upcoming general elections in spring 2024.