- The economic downturn of the pandemic had a significant impact on food prices.
- Average global food prices are now decreasing, even though they're still 25% more expensive than the 2014 - 2016 average.
- The biggest drop is in the vegetable oil sector, caused by lower prices for palm oil due to seasonal production increase and lower import demand.
After the continuous rise of the global FAO Food Price Index over the last twelve months, June marks the first time in a year of average global food prices decreasing. They're still 25 percent pricier than the 2014-2016 average, on which the index baseline of 100 points is calculated, and 33 percent higher than in June 2020.
Have you read?
With nearly ten percent, the biggest drop can be attributed to the vegetable oil sector, reflecting lower prices for palm oil due to prospective seasonal production increase and lower import demand. The latter is also responsible for an increase in sunflower and soyoil prices. The soyoil demand in particular was influenced by the lower-than-expected uptake in biodiesel during the month of June.
For cereals, maize prices throughout Latin America and the US fell due to better-than-expected harvests. A favorable global production outlook in many key producers of barley, sorghum and wheat managed to outweigh the potential uptick in prices due to the dry conditions in North America.
Speculation about whether the disruptions of the coronavirus pandemic would drive up food prices have been abound, but due to the COVID-related economic downturn and falling out-of-house demand, they actually decreased at the start of 2020, reaching a low one year ago. According to the U.N., falling mineral oil prices also factored into the initial deterioration of food prices as many alternative fuels, which are made out of food stocks, saw demand fall. As the crisis wore on and some countries reopened at least temporarily, global demand and prices started to pick up again in the summer of 2020.
What is the World Economic Forum doing to help ensure global food security?
Two billion people in the world currently suffer from malnutrition and according to some estimates, we need 60% more food to feed the global population by 2050. Yet the agricultural sector is ill-equipped to meet this demand: 700 million of its workers currently live in poverty, and it is already responsible for 70% of the world’s water consumption and 30% of global greenhouse gas emissions.
New technologies could help our food systems become more sustainable and efficient, but unfortunately the agricultural sector has fallen behind other sectors in terms of technology adoption.
Launched in 2018, the Forum’s Innovation with a Purpose Platform is a large-scale partnership that facilitates the adoption of new technologies and other innovations to transform the way we produce, distribute and consume our food.
With research, increasing investments in new agriculture technologies and the integration of local and regional initiatives aimed at enhancing food security, the platform is working with over 50 partner institutions and 1,000 leaders around the world to leverage emerging technologies to make our food systems more sustainable, inclusive and efficient.