Why food prices all across the globe are surging to their highest level?

Vegetables and their surging prices
Source: helpguide.org

Global food price all across the world has surged to its all-time high in December of 2020. This was never this high while looking into the past 6 years’ data. Apart from the food, materials like Lumber, steel, meat and a few more products. There are various reasons for this increase in food. One of the major reasons behind this surge is poor supply chain disruption. Covid-19 has created a major problem in the supply chain as all the counties were in lockdown.

Vegetables and their surging prices
Source: helpguide.org

According to the Food price index, the price of food is almost 7.5 times pricier as compared to the data of 2016/2017. The demand for the food is also high compared to the previous year. In China, the demand for corn is all-time high which is quite surprising as well. Similarly, in Brazil due to ongoing drought has slowed down the production of food all across South America. Besides this, the price of palm oil production is slow down which increased the price of vegetable oil by 5%.

The demand for food and other product has surprised everyone so to fulfill this demand we need a strong supply response say Senior Economist of UN Food and Agriculture. Besides this, countries all across the world are printing money to maintain economic balance which has also created inflation. This has added more hunger problems in developing countries like Kenya and South African nations. These countries were already fighting hunger and the pandemic has accelerated it more.

Another reason for the surge of the food product is high oil prices. Earlier the price of oil prices went so high which has resulted in using alternative source including food stock to alternative as a fuel. This has also created palm oil shortage all across the world. Similarly, sugar is another food which has also seen huge demand. India and Brazil is the largest producer of sugar in the world. The both the country has resulted in low production due to lockdown in India and Drought in Brazil. This was the major reason behind the surge of sugar price across the world.

FAO said that the price of most of the food will come to its original price as the winter wheat crops cultivation have increased in a hope higher prices. While talking about other food it is slowly coming to its original level as the production is about to increase.