Last updated on February 9th, 2021 at 11:47 am
As world economies continue to be crushed in the undertow of Covid-19 lockdowns and restrictions, global food prices have reached their highest in almost seven years. And a UN body is warning that the trajectory is a substantial concern.
While prices have yet to reach the levels of the late 2000s food crisis, The United Nation’s Food and Agriculture Organization’s food price index for the month of January rose by a tenth from a year ago; its highest level since July 2014. What is leading the trend are sharp increases in grain prices. According to FAO senior economist Abdolreza Abbassian, “It could become a big issue for less prosperous countries which depend on imports for food.”
The report marks an eighth consecutive monthly increase in food prices, caused mostly by a substantial purchase of corn by China and lower-than-expected production in the United States. Also affecting the price bump were dry weather in South America which happens to be a leading supplier of corn and soybeans to international markets, and Russia’s raising of export tariffs on its world-leading wheat crops.
This news comes on the heels of a January report concerning the cost of shipped goods between China and Europe which more than quadrupled in an 8-week span. A shortage of empty shipping containers due to the effects of the pandemic has jacked the cost of shipping a 40-foot container from Asia to northern Europe from $2000 in November to more than $9000. This “bottleneck problem” stifling global trade stems from last year’s coronavirus lockdown, when thousands of empty containers were left stranded in Europe and the US in the first half 2020. When western demand for Asian-made goods rebounded in the second half of last year, competition for containers sent freight rates soaring.
All of these factors mean families can expect grocery bills to rise substantially. According to Canada’s Food Price Report, Canadian households can expect a rise of three to five percent, meaning $695 extra dollars will be needed to feed a family of four.
“Canada’s food inflation index has outpaced the general inflation index over the last 20 years, and that trend is likely to continue for a while,” the report said.