The five hotspots where people’s food prices worry

Photographer: Leonardo Carrato / Bloomberg

The world is rushing to vaccinate their way out of the coronavirus pandemic, but another challenge has already emerged for some more vulnerable governments and economies.

The world’s food prices are the highest in more than six years, driven by rising costs of everything, from soybeans to palm oil, due to demand from China, vulnerable supply chains and adverse weather.

Some banks warn that the world is becoming a ‘superbike’. Inflation is putting further pressure on consumers who are hurt by the recession caused by pandemics and – in some places – valentine currencies.

Since the beginning of the year, protests raged in Sudan, while food security concerns contributed to strife in Lebanon and Tunisia, which was a zero for the Arab Spring uprisings a decade ago. In India, farmers revolted against attempts to lower prices. Russia and Argentina have restricted crop shipments to suppress prices at home. Even rich countries like the United Arab Emirates might consider it price caps on some foods.

“These price increases are destabilizing, not only because it causes a lot of hardship to communities and households, but also because there is the expectation that the government will do something about it,” he said. Cullen Hendrix, non-resident senior fellow at the Peterson Institute for International Economics, a think tank in Washington. “The implications are going to last longer and longer than the pandemic.”

As always, the impact is excessive. In rich Western countries, this may just be a case of switching between products. In the poorest countries, this can mean the difference between sending a child to school or earning money.

Yet it is in the largest middle-income countries where the consequences can resonate most for the world. It is one of the most populous places on the planet and where food costs make up a larger share of consumer price baskets. This is also where governments, among other things, are under pressure to act.

Brazil: Populist Press

Latin America’s largest economy is striking among emerging markets as it has had the fastest rise in food prices in the past year overall inflation due to a sustained decline in the currency, according to Oxford Economics Ltd.

Meanwhile, President Jair Bolsonaro’s popularity is declining to near-record lows and he is trying to find new ways to soften the electorate. On February 19, he suddenly the head of the state-owned oil company removed after a dispute over fuel prices. He also insisted on a new round of coronavirus assistance to the poor after cash distributions ended in December.

The problem is according to the money served to push up food prices Maria Andreia Lameiras, a researcher at the Ipea Economic Research Institute. Rice rose 76% last year, while milk and beef rose more than 20%. “The government has spent money on the population with the highest expenditure on food,” Lameiras said.

The cost of obtaining essential nutrition threatens to widen inequality in a country with the largest income gap in the region, a situation that remains only exacerbated by the pandemic. Even if aid comes back, the monthly payment will be lower and reach fewer people, limiting the extent of it to reducing extreme poverty.

Russia: History Lesson

Memories of rising prices and empty shelves in the aftermath of the collapse of the Soviet Union are still vivid for many Russians. President Vladimir Putin is apprehensive about the political impact of food costs, as his popularity has barely returned due to protests and protests demanding the release of prison opposition leader Alexei Navalny.

In recent weeks, the world’s number one wheat exporter set tariffs and quotas designed to limit overseas sales and lower domestic prices. The largest retailers in Russia were also ordered to freeze food prices, with potatoes and carrots by more than a third from last year.

But such limits can catch fire again and end up which fuels overall inflation. The audit chamber, a government watchdog, estimated in January that food prices would generally rise if restrictions were lifted by the end of March.

“Russia can see a real political mobilization around food prices,” Hendrix said. “Authoritarian governments tend to allow these types of protests against a kitchen table more than to run more general campaigns against corruption and authoritarian rule. Although, as the Arab Spring has shown, the first can become the last – sometimes very quickly. ”

Nigeria: perfect storm

Food prices in Africa’s largest economy make up more than half of the country’s inflation index and have risen by the year the fastest pace in January over 12 years. An average Nigerian household spends more than 50% of its budget on food. The cost contributes to a perfect storm of food security challenges looming over Nigeria throughout the pandemic.

Foreign exchange reserves needed to import goods have dried up after a drop in oil prices. Provide bottlenecks and attacks on farmers also weighed the supply of agricultural goods. There was also a shortage of staples such as rice after the government restricted imports and closed land borders for 16 months. They reopened in December, but did little to ease inflation.

Food-related grievances played a role in maintaining the # EndSARS protests in the fall. What first started as protests against police brutality under President Muhammadu Buhari, has been stored in a looting of warehouses, such as noodles, rice and pasta.

Turkey: evil leader

As the world’s largest per capita consumer of bread and its leading flour exporter, Turkey has been particularly exposed to a rally in commodity markets. Food prices rose by 18% in January compared to a year earlier, with a sharp rise in staples from grain to vegetables.

Turkey has been struggling with double-digit food inflation for years, but the political implications for President Recep Tayyip Erdogan are growing as food costs hit its core support base, along with the fall in the value of the lira.

Erdogan has investigated the increase in food prices. He said oil, legumes, vegetables and fruits are the ‘biggest issue’. The trade minister could impose fines on businesses that sell high-priced food products, the president warned in January. The problem is that government threats and financial fines in 2019 barely touched the needle.

India: Balance Law

India is home to the most arable land after the USA, and is the world’s largest rice exporter and the second largest wheat producer. At the same time, millions of people do not have access to affordable food, and the country has the highest number of malnutrition in children.

While the cost of staples has risen more slowly in recent weeks, food remains the center of political tension that has dominated India. Demonstrations by farmers escalates over a move by the government of Prime Minister Narendra Modi to liberalize the crop market. Producers are worried that the new law will cause prices to rise.

Modi is working on reforms that many believe are ultimately meant to cut India’s food subsidy account, the largest in the world. The government said in January it was becoming “unmanageably” big. Savings on food and fuel subsidies have often translated into unrest over the next two years and projections do not look good Verisk Maplecroft.

– With the help of Samuel Dodge, Cagan Koc, Tope Alake, Irina Reznik, Sophia Chalmer, Marisa Wanzeller, Tatiana Freitas, Pratik Parija, Simon Kennedy and Max De Haldevang