Food Prices Soar, Compounding Woes of World’s Poor
A surge in food prices is deepening the pain caused by Covid-19 across the developing world, forcing millions into hunger and contributing to social problems that could lead to more political unrest and migration.
Food prices have jumped by nearly a third over the past year, according to the Food and Agriculture Organization of the United Nations, even as pandemic-related job losses are making it harder for families to afford basic staples. Corn prices are 67% higher than a year ago, the FAO says, while sugar is up nearly 60%, and prices for cooking oil have doubled.
Overall prices have risen for 11 consecutive months to the highest levels since 2014, the FAO says.
Many, though not all, of the causes are linked to Covid-19. Global food supply has largely held up after some initial disruptions last year, experts say.
But pandemic-related restrictions on movement have added to logistical costs. Weaker currencies in many developing countries that are struggling to rebound from Covid-19 have made food imports more expensive—-and conversely, in countries such as Brazil, led to greater exports of food, which are now cheaper for foreign buyers, restricting domestic supply.
And many people who lost income because of the pandemic have eschewed more expensive items like meat and fresh vegetables for staples like wheat that fill stomachs but provide less nutrition, pushing up demand and prices.
“What is unique about this time is that prices are going up, and at the same time people’s incomes have been decimated,” said Arif Husain, chief economist at the United Nations World Food Program. “The combination of the two, rising prices and no purchasing power, is the most lethal thing you could deal with.”
Sonia Regina Dominato, a mother of four in a gang-ridden favela in Rio de Janeiro, had to give up a job as a cook during the pandemic to look after her sick grandmother. With the downturn, her husband hasn’t been able to find much work as a laborer.
Short of money to buy beans or fruits, she has watched with dread as her children grew weaker, while Covid-19 raged across Brazil, killing more than 430,000 people.
“I’m terrified they’re going to get sick,” said Ms. Dominato, whose youngest is a year old. “When I see that there is only enough milk for another day, I can’t sleep.”
Previous spikes in food and fuel prices contributed to political instability in recent decades, including the “Arab Spring” revolutions in 2011. While nothing of that scale has emerged this year, expensive food is part of the mix in several countries now experiencing unrest.
In Colombia, anger over hardships caused partly by the pandemic has led to protests in which demonstrators are blocking highways, disrupting delivery of food like eggs and sending prices higher.
Sudan has had to declare a state of emergency in several cities after deadly street protests over rising food costs. The price of wheat there has nearly tripled this year, despite an increased harvest, because of a weaker currency and higher transportation costs, according to Famine Early Warning Systems Network, a U.S.-funded group.
Government moves to end food and fuel subsidies late last year to fulfill economic reforms proposed by the International Monetary Fund further pinched Sudanese consumers.
Rising hunger in countries such as Honduras and Guatemala, meanwhile, is a big reason behind the wave of migrants arriving at the U.S. southern border in recent months, experts say. The number of people facing acute food insecurity jumped 20% in Guatemala and tripled in Honduras early this year compared with 2019, according to a report sponsored by the U.N.
“In terms of food insecurity, we are at the worst point in Guatemala in at least 20 years,” said Iván Aguilar, the country’s coordinator of humanitarian programs for Oxfam, the global charity. “It’s a very worrisome combination of factors, and making things worse, you have weak governments in the region with scarce means to help the poor.”
The WFP says 270 million people are suffering from acute malnutrition or worse situations in the 79 countries in which the agency operates—double the number in 2019.
Other factors have exacerbated the situation. China’s rapid economic recovery has added demand, including for feed to rebuild pig herds, struck by disease in recent years. Such feed contains staples such as corn and soybeans, which are also consumed by humans. Adverse events including dry weather in Argentina and Brazil in October and locust infestations in African nations have also contributed.
In Sierra Leone, a depreciating local currency has pushed up the price of imported rice more than 60%. Ethiopia, Africa’s top wheat grower, has seen prices of its most popular grain soar by over 40% in recent months.
Hardest hit are those in poorer countries who were already living hand to mouth, including low-skilled labor and many working in the informal sector. Because they spend so much of their income on food, price rises are hard to absorb, and their governments can provide little safety net.
For children, the impact can be particularly devastating. The amount of nutrition they receive in the early years is crucial for physical and cognitive development, with the pandemic reversing decades of progress made in child nutrition, experts say.
The World Bank estimates that up to 124 million people sank below the international poverty line—living on less than $1.90 a day—in 2020 as a result of the pandemic. Up to 39 million people more are expected to be added in 2021—taking the total number of those living in extreme poverty to 750 million people.
In Latin America’s biggest country, Brazil, about four in every 10 people have been forced to cut down on fruits and meat during the pandemic, according to a study last month by Brazilian and German researchers. Rice and beans were over 60% more expensive in March than a year earlier.
Argentina, a country famous for its consumption of meat, has seen the crisis bring beef consumption to its lowest level in a century, according to the Beef Industry Chamber of Argentina. On Monday, Argentine President Alberto Fernández said beef exports will be suspended for 30 days in a bid to stem rising domestic prices, sparking outrage among ranchers who planned to protest.
“There’s desperation to eat,” said Pablo Pérez, who heads an organization supporting low-income residents in the Argentine city of La Plata. When handing out food, he said, “we’ve had to separate people who begin to fight because there isn’t enough.”
The despair has even hit wealthier developing nations like Chile, where government data shows the return of malnutrition among school-aged children, a problem which had been virtually wiped out previously.
In Asia, food inflation has bitten especially hard in places like Pakistan, where the prices of chicken, tomatoes and eggs are up 85%, 60% and 46%, respectively, over the past year to April 2021, official figures show. Pakistan has been able to make only a one-time payment worth $77 to 15 million of the poorest households a year ago.
In Pakistan’s most populated and richest province, Punjab, 61% of households in January this year said that they made compromises on food, such as reducing the number or size of meals, according to a survey by the Center for Economic Research in Pakistan, a think tank. That was 10 percentage points worse than in September 2020.
Faizan Abbasi, a father of three young children, had been in the lower rungs of the middle class, working for an estate agency in Islamabad, but lost his job when a lockdown was imposed in spring last year. Now he paints houses as a daily wage laborer. Meat is gone from the family’s diet, and cheaper raw milk has replaced processed milk for the children.
“Prices are on fire,” said Mr. Abbasi. “My child has asked me if meat is no longer sold.”