Food price inflation in 2024 is already worrying - World bank

The world is grappling with inflation in almost all aspects of the economy. However, inflation of food prices is something to really be scared of. You may not need to look at any form of data to tell that you are already paying too much for food. Perhaps in the past few weeks or months, the prices of food locally has climbed to heights that are really a source of worry. A report by the world bank shows that inflation of food prices across the globe is contributing to food insecurity.

2024 Food price inflation data

We will gather insight into the terrible state of food price inflation from this update from the world bank. The data covers a period of time from January 19th 2024 to February 5th, 2024. Consider the key takeaways from the report below:

the agricultural, export, and cereals price indices closed 3%, 7%, and 1% higher source

The above are huge numbers, considering the time period in question. The inflation in prices happened within a month period. Food prices where recorded to have increased by 1%. This increase definitely makes it harder for more people to access food especially in economically challenged countries.

While the above increase was check for foodstuffs as a whole, checking the data for specific food items makes for a sad reading, for example rice.

rice prices are 32% higher source

This is a terribly high inflation price for rice. Considering that rice is a popular food type around the globe, a 32% price increase would definitely put that food off the table of most households

In real terms, food price inflation exceeded overall inflation in 71% of the 165 countries where data is available. source

Beyond the figures and numbers above, what is obtainable in the markets and food shops show the real threat of price inflation. Food prices continue to add on a daily basis which adds more credence to the data collected by the World bank above.

A positive outlook but...

Its not all gloomy according to further data from the world bank report. There is a positive prediction for food prices in the months ahead. But any progress or stability in this area would happen only if certain factors remain stable. Here is what the report has to say in this regard:

Food prices are expected to decline further in 2024 and 2025, although potential risks such as energy cost increases, adverse weather events, trade restrictions, and geopolitical uncertainty could affect them. source

Going by the above assertions, is it only reasonable to expect food prices to continue to rise because the factors above that will contribute to that stability might not be attained. Some of these factors are already responsible for the increased food prices per day.

Take for example the ongoing war between Russia and Ukraine has caused a lot of economic difficulties felt globally. The West has placed sanctions on Russia in order to discourage the war. Russia has reacted by withholding sale of gas to some countries. This has cause the gas shortages in some places and as a result, hike in the price of gas.

The above is just a single example. The war that is still raging continues to have other economic implications both for Russians and the world economy as a whole. Such trade restrictions are not good at all for maintaining price stability of food or reducing the inflation.

Another factor needed for food price inflation to reduce is geopolitical stability. Unfortunately, this is similar to what is happening in Russia too. But there is a more concrete example cited by the article too.

Check out this extract from a report by the International Food Policy Research Institute (IFPRI). This organization has highlighted the effect of geopolitical instability in Gaza. As Israel fights the war in Gaza, Houthi rebels attack commercial cargo ships moving through the Suez canal in solidarity with Palestinians suffering from the bombardment of Gaza. Here is what the report says.

In early January, A.P. Moller-Maersk A/S, the world's second-largest container ship company, announced it would suspend shipments through the Red Sea. Trade volumes in the Suez Canal are down an estimated 40% since the attacks began. source

Shipping companies have to take longer routes around the tip of Africa to avoid the attacks by the Houthis rebels. This is a geopolitical issues with global economic significance. As these shipping companies take a longer route, the cost of foodstuffs moved through those channels will increase. In essence, this will lead to further food price inflation.

From the two examples listed above, it would not be wise to believe that food price inflation will get better down 2024 and into 2025. The way in Ukraine is still raging. Houthis rebels are still sending missiles into commercial ships. Not even included in this assessment is the effent of environmental disasters to agriculture. All these seem to point to one direction - that food prices would likely continue to soar in the coming months and years.