(Bloomberg) – The surge in food prices that is sapping consumer budgets and hitting some of the poorest nations shows little sign of abating.
A United Nations indicator of global costs rose for the ninth consecutive month in February, the longest streak since 2008, when the world faced the first of two food crises in several years. Last month, prices for products from sugar to vegetable oils rose, pushing the overall indicator to a new six-year high.
Food prices have risen due to the huge amounts of crops China buys, harsh weather conditions threatening crops, and reduced supplies of products such as dairy. Higher prices for staple foods are being reflected on supermarket shelves, and emerging markets they look particularly exposed. In addition to exacerbating food inequalities in countries affected by the covid-19 pandemic, the largest costs of food carry the risk of accelerating inflation, making it difficult for central banks to provide more stimulus.
Global food prices increased for the ninth consecutive month.
“This pressure is very worrying,” said Shirley Mustafa, an economist at the Rome-based Food and Agriculture Organization of the United Nations (FAO). “Higher international prices could really exacerbate the economic hardships caused by the pandemic, especially for some vulnerable groups.”
Low-income, import-dependent countries could be among the worst hit. Its cereal import needs are projected to exceed average in the 2020-2021 season, FAO said in a report. He also estimated that some 45 countries need external assistance for food.
Global food prices are still well below a 2011 high and there are signs that increases in grain prices are slowing as their costs advanced 1.2% last month, the smallest rise since July. Supply problems will ease as wheat production is projected to hit a record 780 million tonnes next season, while corn production in Latin America is expected to exceed average, FAO said.
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