According to Bloomberg News, the cost of food globally saw a sharp spike last month leading to a record high and imposing greater inflationary pressure on the governments and the consumers.
As per a United Nations tracking index, staple food ranging from wheat to vegetable oils jumped 3% to a fresh high in a decade in October, thereby threatening consumers of higher household bills for groceries. Households have already been under a lot of strain due to the pandemic. This could also add to the central banks’ inflation risks and worries thereby making the situation worst towards global hunger, which is a layer higher.
As per Bloomberg News, due to bad weather, harvests across the world have been badly hit across the world, cost of freight jumped, and this was followed by a shortage of labor. These aspects have played havoc on the food supply chain right from the farms to the supermarkets.
The energy crisis has caused a headache compelling the vegetable greenhouses to be pushed to the dark causing a risk for an impending bigger bill for fertilizers for the farmers.
According to a senior economist associated with UN Food and Agriculture Organization, Abdolreza Abbassian, inputs and fertilizers-related issues are the main implications and a concern for the next years’ concern.
Although, the market has factored in-demand issues for the current year but not for the next year. Few regions will still face food security challenges. The United Nations, Thursday, raised the global wheat trade outlook to a record triggered by the purchases that spiked in Iran to Afghanistan. Due to droughts, crops there were slashed, enhancing dependency on imported grains at a time when the prices are skyrocketing.
He also stated that this is perhaps the worst time for these nations because the global prices are so high. He also said that “We cannot afford a bad year in 2022 for important crops”.
According to Bloomberg News, the bigger expenses for the farmers could curtail plantings of the Northern Hemisphere now underway. The price of food grains in October was triggered by the higher cost of grains and vegetable oils.
There are, however, still signs of foods stabilizing with meat and sugar dropping last month. Supply from global grain and oilseed are adequate to meet demands, and the prices of rice, which is one of the most important staples are subdued. The higher cost of fertilizers is a cause for concern for the next year.
