Latest Update – January 30, 2023
Domestic food price inflation remains high around the world. Information between September to December 2022 shows high inflation in almost all low-income and middle-income countries; 83.3% of low-income countries, 90.5% of lower-middle-income countries, and 91% of upper-middle-income countries have seen inflation levels above 5%, with many experiencing double-digit inflation. The share of high-income countries with high food price inflation has risen to 85.7%. The countries affected most are in Africa, North America, Latin America, South Asia, Europe, and Central Asia.
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The agricultural and cereal price indices closed 1% and 2% higher, respectively, than two weeks ago. The export index closed at the same level. Maize and rice prices, which closed 3% and 4% higher, respectively, drove the increase in the cereal index, whereas wheat prices closed 1% lower than two weeks ago. On a year-on-year basis, maize and rice prices are 10% and 16% higher, respectively, and wheat prices are 3% lower. Maize and wheat prices are 31% and 12% higher, respectively, than in January 2021, and rice prices are 5% lower. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
Fertilizer prices have declined from their peak in early 2022 but remain at historically high levels. Much of the decline can be attributed to weak demand caused by problems with affordability and availability. Supply-side challenges are also affecting fertilizer markets, including production shortages in Europe, disruptions caused by sanctions on Russia and Belarus, and trade restrictions in China.
The FAO Food Price Index (FFPI), a measure of monthly change in international prices of a basket of food commodities, declined for the ninth consecutive month, the FAO reported in a January 2023 press release. It averaged 132.4 points in December 2022, down 2.6 points from November and 1.3 points from December 2021. A sharp decrease in international vegetable oil prices and a moderate fall in cereal and meat prices drove the change. Increases in sugar and dairy prices somewhat offset these declines. For the entire year of 2022, the FFPI averaged 143.7 points, up from 2021 by as much as 18 points.
A joint press release by the United Nations System and the UN Global Action Plan on Child Wasting has called for urgent action to protect the most vulnerable children in the 15 countries hardest hit by the unprecedented food and nutrition crisis. More than 30 million children in these countries suffer from wasting—or acute malnutrition—and 8 million of these children suffer from severe wasting, the deadliest form of malnutrition. Conflict, climate shocks, the ongoing COVID-19 pandemic, and rising costs of living are increasing the number of acutely malnourished children as access to key health, nutrition, and other life-saving services declines.
Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. The global food crisis has been partially made worse by the growing number of food trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices. As of December 2022, 19 countries have implemented 23 food export bans, and eight have implemented 12 export-limiting measures.
According to the Global Report on Food Crisis 2022 Mid-year Update, up to 205 million people are expected to face acute food insecurity and to be in need of urgent assistance in 45 countries.
World Bank Action
As part of a comprehensive, global response to the food security crisis, in May 2022 the World Bank announced that it is making up to $30 billion available over a period of 15 months, including $12 billion in new projects. From April through September, the Bank has committed $8.1 billion for new projects across 47 countries – most of this support is in Africa, which is one of the hardest hit regions by the food crisis. This financing will include efforts to encourage food and fertilizer production, enhance food systems, facilitate greater trade, and support vulnerable households and producers such as:
- $50 million grant of additional financing for Tajikistan to mitigate food and nutrition insecurity impacts on households and enhance the overall resilience of the agriculture sector.
- A $125 million project in Jordan aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
- A $300 million project in Bolivia that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
- A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness once morest food insecurity and to improve the resilience of their food systems.
- A $500 million Emergency Food Security and Resilience Support Project to bolster Egypt’s efforts to ensure that poor and vulnerable households have uninterrupted access to bread, help strengthen the country’s resilience to food crises, and support to reforms that will help improve nutritional outcomes.
- A $130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production and seeds for smallholder farmers for the upcoming planting season.
- The $2.3 billion Food Systems Resilience Program for Eastern and Southern Africa, helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. The program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.
In May, the World Bank Group and the G7 Presidency co-convened the Global Alliance for Food Security, which aims to catalyze an immediate and concerted response to the unfolding global hunger crisis. The Alliance has developed the publicly accessible Global Food and Nutrition Security Dashboard, which provides timely information for global and local decision-makers to help improve coordination of the policy and financial response to the food crisis.
The heads of the FAO, IMF, World Bank Group, WFP, and WTO released a Second Joint Statement on the Global Food Security and Nutrition Crisis, which notes that considerable progress has been made in the four key areas: providing immediate support to the vulnerable, facilitating trade and the international supply of food, boosting production, and investing in climate-resilient agriculture.
Last Updated: Jan 30, 2023
