Latest Update – February 27, 2023
Domestic food price inflation remains high around the world. Information from the latest month between October 2022 and January 2023 for which food price inflation data are available shows high inflation in almost all low- and middle-income countries, with inflation levels above 5% in 88.9% of low-income countries, 87.8% of lower-middle-income countries, and 93.0% of upper-middle-income countries and many experiencing double-digit inflation. In addition, about 87.3% of high-income countries are experiencing high food price inflation. The countries affected most are in Africa, North America, Latin America, South Asia, Europe, and Central Asia.
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The agricultural, cereal, and export price indices remained stable over the last two weeks, with the agricultural and export price indices closing 1% higher, and the cereal price index closing at the same level. Maize, wheat, and rice prices all closed within 1% of their levels two weeks ago. On a year-on-year basis, maize and rice prices are 9% and 16% higher, respectively, and wheat prices are 3% lower. Maize and rice prices are 4% and 18% higher, respectively, and wheat prices are 5% lower. Maize and wheat prices are 32% and 15% higher than in January 2021, and rice prices are 1% lower. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
The most recent Food Price Monitoring and Analysis Bulletin released by the Food and Agriculture Organization (FAO) revealed mixed trends for international cereal prices in January 2023. World wheat prices fell in January for a third consecutive month; international coarse grain prices remained mostly unchanged; and international rice prices rose at an accelerated pace in January 2023. Overall, FAO’s analysis indicates that high prices have persisted for the past three months despite some evidence of easing from 2022 peaks in certain countries, with rice price hikes mostly responsible for sustained high cereal prices.
According to the GEOGLAM Crop Monitor for Early Warning February 2023 edition, a sixth consecutive season with poor rainfall performance in eastern East Africa is likely. The El Niño Southern Oscillation (ENSO) is currently in the La Niña phase, but a transition to a neutral ENSO state is likely, with a 73% chance of ENSO-neutral conditions from February through April. Despite this transition, atmospheric responses to La Niña can linger. Seasonal forecasts indicate that La Niña precipitation impacts may continue through the next several months.
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 February 11, 2023, 23 countries have implemented 29 food export bans, and ten have implemented 14 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. The financing is to scale up short- and long-term responses along four themes to boost food and nutrition security, reduce risks, and strengthen food systems: (i) support producers and consumers, (ii) facilitate increased trade in food and trade inputs, (iii) support vulnerable households, and (iv) invest in sustainable food and nutrition security.
Between April to December 2022, the Bank’s food and nutrition security commitments in new lending have passed the $12 billion mark – with almost half for Africa, which is one of the hardest hit regions by the food crisis. Some examples include:
- $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 against 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 Third Joint Statement on February 8, 2023. The statement calls to prevent a worsening of the food and nutrition security crisis, further urgent actions are 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. Countries should balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.
Last Updated: Feb 27, 2023