CHICAGO (Reuters – Why is food price rising in Chicago?

Mid-2020 saw global food prices rise as businesses closed down in response to the COVID-19 epidemic, which strained supply chains. Lack of trucks to transport the goods to supermarkets caused farmers to dump their milk, and produce and vegetable rot. Prices rose as more people bought food. Worldwide crops were affected by a shortage of migrants as lockdowns prevented movement.

Many key crops have suffered from droughts in various parts of the globe since that time. Brazil was the top exporter of soybeans in the world, but it suffered severe drought in 2021. China’s 2018 wheat crop was among its worst. Certain countries hoarded staple foods to prevent future shortages.

The outlook on food prices was dramatically impacted by Russia’s February invasion of Ukraine. According to the U.N. Food Agency, prices reached an all time record in March and February. Nearly a third global wheat production and two-thirds worldwide sunflower oil exports are from Ukraine and Russia. Ukraine is world number 4. 4 corn exporter. Conflict has caused damage to Ukraine’s infrastructure and ports, which will likely limit Ukraine’s agricultural production over the next few years.

Due to Western sanctions, some buyers have stopped buying grain from Russia.

In late April, Indonesia prohibited palm oil exports to protect domestic supply. This was to cut off oil supplies from Indonesia’s biggest producer.

Which food are the highest-priced? 

High vegetable oil prices contributed to higher food costs during the pandemic. Due to limited supplies of wheat and corn during the Ukraine war, cereal prices reached a new record high in March.

Dairy and meat prices reached a record in April, according to the U.N. food agency, reflecting continually increasing global demand for protein and high prices for animal feed – mainly corn and soybeans. The egg and poultry market was also affected by the bird flu epidemics in North America, Europe, and North America.

U.S. inflation data March showed that the U.S. index for meats and poultry rose 14% compared to a year ago, while beef rose 16%.

What time will the food price drop?

Because agricultural production relies on weather and other unpredictable variables, it is difficult to predict. Antonio Guterres (UN Secretary-General) stated that the global problem of food insecurity cannot be resolved without restoring Ukrainian agricultural production, and Russian food and fertilizer exports to the world.

According to The World Bank, the World Bank predicts that wheat prices may rise up to 40% by 2022. The Bank predicts that agricultural prices will decline in 2023, compared to 2022. This depends on higher crop supplies from Argentina, Brazil, and the United States. It is not guaranteed.

A sharp rise in fertilizer price as major countries refuse to purchase from Russia and Belarus could make it difficult for farmers to apply adequate nutrients on their crops. This could lead to lower yields, which in turn can prolong the crisis. The risk of crop failure is increasing as extreme weather becomes more common in the warmer climate.

Which is the most affected?

Fitch Ratings reported that food prices accounted for most of the U.S. inflation since 1981. However, shop prices increased in Britain at the fastest rate in over a decade in April. However, the most affected by rising food prices are those in developing countries where more of their incomes go to food.

Global Network Against Food Crises was established by the United Nations, European Union and other organizations. It stated in its annual report that Russia’s invasion of Ukraine is a serious threat to global food security.