40% increase in wheat prices in 2022? (World Bank). You may have noticed, food prices have been increasing over the past few months. CNBC reported that food-at-home prices are expected to increase by 3-4% before 2023, and grocery prices have increased 7.9% in February 2022. The price increase is a general figure, and actual increase varies depending on the type of food. For example, meat and fish are up 13%, whereas vegetables are up at a much lower 4.3%.
(note that these numbers are specific to the US, and different countries experience different levels of price variations)
Reasons for the price increase:
1) Covid-19. Business shutdowns and country lockdowns strained supply chains, shortage of labour, concerns of food security which caused some countries to limit supply to the global market.
2) Ukraine crisis. Russia and Ukraine account for almost 1/3 of the global wheat and barley market, and majority of the world's export of sunflower oil (cooking oil). Some knock-on effects include other exporting countries to ban their own exports to maintain food security in their countries.
Countries have begun to be more protectionist and reduced reliance on foreign countries during the pandemic. This issue of food shortage will likely spur further protectionism (as already seen in the case of Indonesia banning palm oil exports), and countries already facing a food crisis will likely bear the brunt of the food shortage. Such countries include Somalia, which obtained most of its wheat from Russia and Ukraine in 2021.
As individuals, we can reduce food waste, help one another out, or even plant some foods of our own. Let's hope things get better ASAP.
Edit: why did the price of meat and fish increase more than vegetables? This is dependent on how the supply chains have been affected. Meat and fish are said to have more labour involved along the value chain as compared to vegetables, which could be a reason for this. Aside from labour shortages, food for livestock are also more expensive now, further driving up the cost.
