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.

After three consecutive months of increasing prices, the FAO Food Price Index remained steady in June, with rising vegetable oil, sugar, and dairy prices balancing falling cereal prices. The Index remained 2.1 percent below its June 2023 level and almost 25 percent below the peak seen in March 2022.

Spiking food prices have made headlines around the world this year, from eggs in the US to vegetables in India.

The UN Food and Agriculture Organization’s Food Price Index has been slowly increasing over the past six months following declines over much of 2023.

For example, the price of orange juice concentrate in the US was 42% higher in April than it was a year ago, while the price of fresh orange juice in the UK has risen 25% over the last year.

Recent shocks from the COVID-19 pandemic to the ongoing Russia-Ukraine war have disrupted global food and fertilizer supply chains—causing price spikes and increased price volatility—a disastrous combination for many vulnerable consumers around the world.

The FAO Food Price Index rose by nearly 1 percent in May due to increased cereal and dairy prices. It remained 3.4 percent below its May 2023 levels and nearly 25 percent below the peak seen in March 2022.

Despite an increase in food aid delivered to the region, the food security situation in the Gaza Strip remains dire, according to an updated FEWS Net report released in late April.

Cocoa bean prices have been rising since the last quarter of 2023, hitting a record high of $10.97 per kilogram on April 19 (Figure 1). The price spike is due to a significant drop in bean production by major global suppliers—four key producing nations in West and Central Africa account for more than 60% of the world's supply of cocoa beans: Cote d’Ivoire (with 38% of the global production in 2022), Ghana (19%), Nigeria (5%), and Cameroon (5%).1

The FAO Food Price Index rose marginally in April but remained 7.4 percent below its April 2023 level. The slight increase was driven by rising meat, vegetable oil, and cereal prices.

Hunger continues to rise across the globe, with nearly 282 million people facing acute food insecurity in 2023, according to the 2024 Global Report on Food Crises (GRFC).  This number is up by 24 million from 2022, marking the fifth consecutive year that food insecurity has risen.