Back to Specialty Food News

Political, Environmental Unease May Affect Food Prices

Analysts warn that global food prices may become volatile as extreme weather, Russia’s targeting of grain supplies in Ukraine, and countries’ policies conserving individual food supplies come to a head, reports The New York Times. The news comes as inflation begins to ease in the U.S. and Europe.

“This is the new normal now, with more volatility and unpredictability, whether that’s in commodity prices or food prices,” said Dennis Voznesenski, a commodities analyst at Rabobank in Sydney, Australia.

Droughts in India, Indonesia, and other Asian food export countries have led to small crop harvests. This has caused these countries to become more protective of their supply. For example, India has issued an export ban on non-basmati white rice, pushing rice prices up globally by nearly 20 percent from last year, according to the U.N. Food and Agriculture Organization.

Small farmers and people living in low-income countries are particularly affected by these disruptions.

“The accumulation of the last shocks in the last few years have put countries in a very, very bad situation,” said Maximo Torero, the chief economist of the United Nations’ Food and Agriculture Organization. “If another shock comes today, I honestly don’t know how they’re going to handle it.”

As the world deals with food supply issues, related costs are increasing too, further burdening the food industry, including food producers, importers, distributors, and more. Labor costs have increased, for example, as have insurance policies. Full Story (Subscription Required)

Related: Industry Voices: Inflation Changed Consumer Behavior; The Giant Company, Kellogg Combat Food Insecurity