Expensive food

According to the World Bank, domestic food price inflation remains high in many low- and middle-income countries.

Inflation higher than five percent is experienced in 70 percent of low-income countries (6.2 percentage points lower), 47.8 percent of lower-middle-income countries (three percentage points lower), 36 percent of upper-middle-income countries (two percentage points lower) and 9.1 percent of high-income countries (0.2 percentage points higher).

In real terms, food price inflation exceeded overall inflation in 59.8 percent of the 164 countries where data are available.

Since the World Bank’s last update on Oct. 18, the agricultural and cereal price indices rose by one and two percent, respectively; the export price index remained unchanged. Maize prices increased by seven percent, while wheat and rice prices fell by five percent, respectively.

On a year-on-year basis, maize prices are nine percent lower and rice prices are eight percent lower, while wheat prices are one percent higher. Compared to January 2020, maize prices are nine percent higher, wheat prices are three percent lower, and rice prices are 29 percent higher.

The November 2024 Agricultural Market Information System (AMIS) Market Monitor highlighted various price fluctuations and policy changes in global agriculture in October. Wheat prices reached multi-month highs, largely because of weather-related planting delays in the northern hemisphere, but later eased as conditions improved.

Maize prices also increased slightly, even with swift harvest progress in the United States, whereas rice and soybean prices fell. In policy moves, India removed the minimum export price for non-basmati white rice, and Bangladesh and Turkey relaxed import restrictions on maize, rice, and vegetable oils.

In the most recent Commodity Markets Outlook, the World Bank projects a four percent decline in the agriculture commodity prices index in 2025 before stabilizing in 2026, after a two percent increase this year.

The report also summarizes concerns about food insecurity and notes that the world remains far from achieving the goal of zero hunger by 2030. Conflict, extreme weather and economic shocks are the major drivers of food insecurity. It is projected that food prices will decrease by four percent in 2025 before stabilizing in 2026.

The latest Hunger Hotspots Report by the Food and Agriculture Organization (FAO) of the United Nations and the World Food Program (WFP) warns of worsening acute food insecurity in 16 hunger hotspots (covering 22 countries and territories) that will require urgent action between now and May 2025. Conflict, climate and the economy are the primary drivers of food insecurity. Conflict continues to be the primary driver of hunger in 15 hotspots.

The Philippines, thankfully, is not yet among the countries suffering from acute food insecurity.

Specifically for Asia, the World Bank reports that East Asia and the Pacific remain highly vulnerable to the impacts of climate change, with extreme weather events becoming more frequent and severe.

Weather forecasters predict that La Niña conditions will prevail from October onwards, contributing to a chance of above-normal rainfall in several countries, including the Lao People’s Democratic Republic (PDR), the Philippines, Thailand and Vietnam.

Last month, Tropical Storm Trami or Typhoon Kristine hit several provinces on Luzon Island in the Philippines, resulting in widespread flooding and landslides, leaving at least 126 dead and missing. Many areas remain isolated, with people in need of rescue.

The cost of damage to the agricultural sector in the Philippines from Typhoon Kristine was estimated at P3.11 billion, with 74,554 farmers affected across 11 regions.

Damaged farmlands covered 72,329 hectares, with a production loss of 160,107 metric tons. The rice sector was the hardest hit, with losses of 152,440 metric tons and a value of P2.87 billion. High-value crops suffered P121.08 million in damage. Damage to agricultural infrastructure, including irrigation facilities and other farm structures, totaled P67.66 million.

The Department of Agriculture, however, reported that at least 60 to 70 percent of farmers in the affected areas had already harvested their palay (unhusked rice) before Kristine made landfall. However, the DA also predicted that palay production would likely drop by 3.24 percent this year due to the continued onslaught of tropical cyclones.

Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. The global food crisis has been partially worsened by the growing number of food and fertilizer trade restrictions put in place by countries aiming to increase domestic supply and reduce prices. As of now, 17 countries have implemented 22 food export bans, and eight countries have implemented 12 export-limiting measures.

The World Bank’s food and nutrition security portfolio now spans 90 countries. It includes both short-term interventions such as expanding social protection and longer-term resilience initiatives such as boosting productivity and climate-smart agriculture. The Bank’s intervention is expected to benefit 296 million people.

In May 2022, 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.

Last year, the heads of the FAO, IMF, World Bank Group, WFP and WTO released a third joint statement calling for preventive action against a worsening food and nutrition security crisis, with further urgent actions required to (i) rescue hunger hotspots, (ii) facilitate trade, improve the functioning of markets, and enhance the role of the private sector, and (iii) reform and repurpose harmful subsidies with careful targeting and efficiency.

They appealed for countries to balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.