Food shortages and inflated prices are causing more economic pressure on consumers, in which analysts have accredited a multitude of compounding factors; COVID-19 pandemic and subsequent recovery; conflict engulfing Ukraine and hindering their agricultural exports; drought throughout the Western United States.
Just seven countries make up 86% of wheat exports while three countries make up 63% of the world’s wheat reserves. These figures are similar when it comes to corn, coarse grains, rice, and soy. Ukraine and Russia collectively supplied 30% of the world’s wheat and barley before the war, where 36 countries relied on them for over half of all wheat imports.
According to Reuters, the Global Food Index is up 58.5% from averages in 2014-2016, where prices for meats and sugar have increased 21.8% respectively while cereals are up 69.5%. The United States has seen an increase in its Consumer Price Index of 14.4% as of April 15th 2022, Germany 12.4%, and the United Kingdom 6.3%. Middle-Income countries and Lower-Middle-Income countries have seen violent price increases, such as Egypt with a 35.4% increase and Argentina 161.2% increase over a two year period. Some countries are buckling under the strain of these new trends, many Lower-Middle-Income countries have reported to be in danger of a debt crisis and many are already experiencing one.
Countries experiencing some of the largest consumer price increases are also some of the largest importers of Ukrainian and Russian grain. For example, in Egypt, Russian and Ukrainian wheat account for over 70% of foreign imports and 30% of its corn imports come from Ukraine.
Prices remain on the rise and there is little evidence of them rebounding in the near future.