Food prices refer to the average price level for food across countries, regions and on a global scale. [1] Food prices affect producers and consumers of food. Price levels depend on the food production process, including food marketing and food distribution. Fluctuation in food prices is determined by a number of compounding factors. [2] Geopolitical events, global demand, exchange rates, [3] government policy, diseases and crop yield, energy costs, availability of natural resources for agriculture, [4] food speculation, [5] [6] [7] changes in the use of soil and weather events directly affect food prices. [8] To a certain extent, adverse price trends can be counteracted by food politics.
The consequences of food price fluctuation are multiple. Increases in food prices, or agflation, endangers food security, particularly for developing countries, and can cause social unrest. [9] [10] [11] Increases in food prices is related to disparities in diet quality and health, [12] particularly among vulnerable populations, such as women and children. [13]
Food prices will on average continue to rise due to a variety of reasons. Growing world population will put more pressure on the supply and demand. Climate change will increase extreme weather events, including droughts, storms and heavy rain, and overall increases in temperature will affect food production. [14]
An intervention to reduce food loss or waste, if sufficiently large, will affect prices upstream and downstream in the supply chain relative to where the intervention occurred. [15] "The CPI (Consumer Price Index) for all food increased 0.8% from July 2022 to August 2022, and food prices were 11.4% higher than in August 2021." [16]
Food production is a very energy-intensive process. Energy is used in the raw materials for fertilizers to powering the facilities needed to process the food. Increases in the price of energy leads to an increase in the price of food. [17] [18] Oil prices also affect the price of food. [19] Food distribution is also affected by increases in oil prices, [20] leading to increases in the price of food.
Adverse weather events such as droughts or heavy rain can cause harvest failure. There is evidence that extreme weather events and natural disasters cause increased food prices.[ citation needed ] Climate change will increase extreme weather events, including droughts, storms and heavy rain, and overall increases in temperature will affect food production. [14]
Water is a necessary natural resource for organic life making it an essential component in producing goods that sustains human life. [21] For example, a continuing drought in South Africa [22] may - amongst other factors - have food inflation soar 11% until end of 2016 according to the South African Reserve Bank. [23] A drought turns fresh water into a rare commodity making it hard to come by in food production, thus inflating food prices. [21]
The price of food has risen quite drastically during the 2007–08 and the 2010–2012 world food price crises. It has been most noticeable in developing countries while less so in the OECD countries and North America. [24] [25]
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.[ clarification needed ] 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. [26] [27]
The Food and Agriculture Organization (FAO) of the United Nations has developed an "early warning tool" called the Food Price and Monitoring Analysis (FPMA). [28] After the food crisis of 2008 and 2011, FAO developed an "early warning indicator to detect abnormal growth in prices in consumer markets in the developing world". [29] The FPMA uses a variety of data sources to feed their database. [30]
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. [31] The report was created by Canadian researchers Sylvain Charlebois and Francis Tapon.
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". [32]
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. [34]
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 |
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. [35]
It is rare for price spikes to hit all major foods in most countries at once, but food prices suffered all-time peaks in 2008 and 2011, posting a 15% and 12% deflated increase year-over-year, representing prices higher than any data collected. [36] One reason for the increase in food prices may be the increase in oil prices at the same time. [37] [38]
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. [39]
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, [40] and the Arab Spring. [41]
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 fertilizer, diesel and labor. 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 harms 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. [42]
In 2015–2020, global food prices have been more stable and relatively low, after a sizable increase in late 2017, they are back under 75% of the nominal value seen during the all-time high in the 2011 food crisis. In the long term, prices are expected to stabilize. [39] Farmers will grow more grain for both fuel and food and eventually bring prices down. [39] This has already occurred with wheat, [43] [44] 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. [39]
In 2021, global food prices rose significantly in larger part due to supply chain disruptions during the COVID pandemic , [45] and in 2022, the FAO reported that the world Food Price Index reached an all-time high in February, posting a 24% year-over-year increase. Most of the data for the February report was compiled before the 2022 Russian invasion of Ukraine, but analysts said a prolonged conflict could have a major effect on grain exports catalyzing a further food crises. [46] [47] [48]
This article incorporates text from a free content work. Licensed under CC BY-SA 3.0( license statement/permission ). Text taken from The State of Food and Agriculture 2019. Moving forward on food loss and waste reduction, In brief , 24, FAO, FAO.
In politics, humanitarian aid, and the social sciences, hunger is defined as a condition in which a person does not have the physical or financial capability to eat sufficient food to meet basic nutritional needs for a sustained period. In the field of hunger relief, the term hunger is used in a sense that goes beyond the common desire for food that all humans experience, also known as an appetite. The most extreme form of hunger, when malnutrition is widespread, and when people have started dying of starvation through lack of access to sufficient, nutritious food, leads to a declaration of famine.
Food security is the availability of food in a country and the ability of individuals within that country (region) to access, afford, and source adequate foodstuff. The availability of food irrespective of class, gender or region is another element of food security. Similarly, household food security is considered to exist when all the members of a family, at all times, have access to enough food for an active, healthy life. Individuals who are food secure do not live in hunger or fear of starvation. Food insecurity, on the other hand, is defined as a situation of " limited or uncertain availability of nutritionally adequate and safe foods or limited or uncertain ability to acquire acceptable foods in socially acceptable ways". Food security incorporates a measure of resilience to future disruption or unavailability of critical food supply due to various risk factors including droughts, shipping disruptions, fuel shortages, economic instability, and wars.
Food distribution is the process where a general population is supplied with food. The Food and Agriculture Organization (FAO) considers food distribution as a subset of the food system. The process and methodology behind food distribution varies by location. Food distribution has been a defining characteristic of human behavior in all societies, and recordings of food distribution date back for thousands of years. Most governments and societies are highly shaped by the systems created to support food distribution.
Malawi is one of the world's undeveloped countries and is ranked 170 out of 187 countries according to the 2010 Human Development Index. It has about 16 million people, 53% of whom live under the national poverty line, and 90% of whom live on less than $2 per day.
Food politics is a term which encompasses not only food policy and legislation, but all aspects of the production, control, regulation, inspection, distribution and consumption of commercially grown, and even sometimes home grown, food. The commercial aspects of food production are affected by ethical, cultural, and health concerns, as well as environmental concerns about farming and agricultural practices and retailing methods. The term also encompasses biofuels, GMO crops and pesticide use, the international food market, food aid, food security and food sovereignty, obesity, labor practices and immigrant workers, issues of water usage, animal cruelty, and climate change.
Export restrictions, or a restriction on exportation, are limitations on the quantity of goods exported to a specific country or countries by a Government. Export restrictions could be aimed at achieving diverse policy objectives such as environmental protection, economic welfare, social wellbeing, conversion of natural resources, and controlling inflationary pressures. There are various forms of restrictions on export as defined by WTO's Trade Policy Reviews (TPR), for example, export duties, quantitative restrictions, voluntary export restrictions, export prohibitions and licensing requirements. Although some countries apply export restriction of various policy purposes, restrictions on exports provide price advantage for the domestic industries because these restrictions create price difference between domestic goods compared to the price of the same goods to foreign investors. Export restrictions don't always provide benefits for the country and more income for the government. In the field of agriculture and food sector export restrictions are aimed at protecting the domestic food security from international supply. During the food crises of 2007–2008, more than thirty countries imposed various export restriction measures such as quantitative export restrictions, prohibitions, export taxes, and price controls to protect the domestic food supply. However, this created additional pressures on the food crises by imposing high global prices and affecting the supply of food in the international market.
A sustainable food system is a type of food system that provides healthy food to people and creates sustainable environmental, economic, and social systems that surround food. Sustainable food systems start with the development of sustainable agricultural practices, development of more sustainable food distribution systems, creation of sustainable diets, and reduction of food waste throughout the system. Sustainable food systems have been argued to be central to many or all 17 Sustainable Development Goals.
Agriculture is still an important sector of Turkey's economy, and the country is one of the world's top ten agricultural producers. Wheat, sugar beet, milk, poultry, cotton, vegetables and fruit are major products; and Turkey is the world's largest grower of hazelnuts, apricots, and oregano.
Agriculture in Ghana consists of a variety of agricultural products and is an established economic sector, providing employment on a formal and informal basis. It is represented by the Ministry of Food and Agriculture. Ghana produces a variety of crops in various climatic zones which range from dry savanna to wet forest which run in east–west bands across Ghana. Agricultural crops, including yams, grains, cocoa, oil palms, kola nuts, and timber, form the base of agriculture in Ghana's economy. In 2013 agriculture employed 53.6% of the total labor force in Ghana.
World food prices increased dramatically in 2007 and the first and second quarter of 2008, creating a global crisis and causing political and economic instability and social unrest in both poor and developed nations. Although the media spotlight focused on the riots that ensued in the face of high prices, the ongoing crisis of food insecurity had been years in the making. Systemic causes for the worldwide increases in food prices continue to be the subject of debate. After peaking in the second quarter of 2008, prices fell dramatically during the late-2000s recession but increased during late 2009 and 2010, reaching new heights in 2011 and 2012 at a level slightly higher than the level reached in 2008. Over the next years, prices fell, reaching a low in March 2016 with the deflated Food and Agriculture Organization (FAO) food price index close to pre-crisis level of 2006.
The term food system describes the interconnected systems and processes that influence nutrition, food, health, community development, and agriculture. A food system includes all processes and infrastructure involved in feeding a population: growing, harvesting, processing, packaging, transporting, marketing, consumption, distribution, and disposal of food and food-related items. It also includes the inputs needed and outputs generated at each of these steps. Food systems fall within agri-food systems, which encompass the entire range of actors and their interlinked value-adding activities in the primary production of food and non-food agricultural products, as well as in food storage, aggregation, post-harvest handling, transportation, processing, distribution, marketing, disposal, and consumption. A food system operates within and is influenced by social, political, economic, technological and environmental contexts. It also requires human resources that provide labor, research and education. Food systems are either conventional or alternative according to their model of food lifespan from origin to plate. Food systems are dependent on a multitude of ecosystem services. For example, natural pest regulations, microorganisms providing nitrogen-fixation, and pollinators.
The Global Hunger Index (GHI) is a tool that attempts to measure and track hunger globally as well as by region and by country, prepared by European NGOs of Concern Worldwide and Welthungerhilfe. The GHI is calculated annually, and its results appear in a report issued in October each year.
In the agricultural context, diversification can be regarded as the re-allocation of some of a farm's productive resources, such as land, capital, farm equipment and labour to other products and, particularly in richer countries, to non-farming activities such as restaurants and shops. Factors leading to decisions to diversify are many, but include: reducing risk, responding to changing consumer demands or changing government policy, responding to external shocks and, more recently, as a consequence of climate change.
Human food is that food which is fit for human consumption, and which humans willingly eat. Not all things that are edible constitute human food. Food is a basic necessity of life, and humans typically seek food out as an instinctual response to hunger.
Gender inequality both leads to and is a result of food insecurity. According to estimates, women and girls make up 60% of the world's chronically hungry and little progress has been made in ensuring the equal right to food for women enshrined in the Convention on the Elimination of All Forms of Discrimination Against Women. Women face discrimination both in education and employment opportunities and within the household, where their bargaining power is lower. On the other hand, gender equality is described as instrumental to ending malnutrition and hunger. Women tend to be responsible for food preparation and childcare within the family and are more likely to be spent their income on food and their children's needs. The gendered aspects of food security are visible along the four pillars of food security: availability, access, utilization and stability, as defined by the Food and Agriculture Organization.
Sustainable Development Goal 2 aims to achieve "zero hunger". It is one of the 17 Sustainable Development Goals established by the United Nations in 2015. The official wording is: "End hunger, achieve food security and improved nutrition and promote sustainable agriculture". SDG 2 highlights the "complex inter-linkages between food security, nutrition, rural transformation and sustainable agriculture". According to the United Nations, there are around 690 million people who are hungry, which accounts for slightly less than 10 percent of the world population. One in every nine people goes to bed hungry each night, including 20 million people currently at risk of famine in South Sudan, Somalia, Yemen and Nigeria.
The 2021–2023 global energy crisis began in the aftermath of the COVID-19 pandemic in 2021, with much of the globe facing shortages and increased prices in oil, gas and electricity markets. The crisis was caused by a variety of economic factors, including the rapid post-pandemic economic rebound that outpaced energy supply, and escalated into a widespread global energy crisis following the Russian invasion of Ukraine. The price of natural gas reached record highs, and as a result, so did electricity in some markets. Oil prices hit their highest level since 2008.
Agrifood systems encompass the primary production of food and non-food agricultural products, as well as in food storage, aggregation, post-harvest handling, transportation, processing, distribution, marketing, disposal and consumption. Within agrifood systems, food systems comprise all food products that originate from crop and livestock production, forestry, fisheries and aquaculture, and from other sources such as synthetic biology, and that are intended for human consumption.
During 2022 and 2023 there were food crises in several regions as indicated by rising food prices. In 2022, the world experienced significant food price inflation along with major food shortages in several regions. Sub-Saharan Africa, Iran, Sri Lanka, Sudan and Iraq were most affected. Prices of wheat, maize, oil seeds, bread, pasta, flour, cooking oil, sugar, egg, chickpea and meat increased. The causes were disruption in supply chains from the COVID–19 pandemic, an energy crisis, the Russian invasion of Ukraine and some effects of climate change on agriculture. Significant floods and heatwaves in 2021 destroyed key crops in the Americas and Europe. Spain and Portugal experienced droughts in early 2022 losing 60-80% of the crops in some areas.
The 2020s commodities boom refers to the rise of many commodity prices in the early 2020s following the COVID-19 pandemic. The COVID-19 recession initially made commodity prices drop, but lockdowns, supply chain bottlenecks, and dovish monetary policy limited supply and created excess demand causing a commodity super cycle rise.
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