INDIA: Global food prices have skyrocketed to the highest level in the past decade. Food and Agriculture Organization of the United Nations (FAO) has published a report related to the rising food prices. According to the report, food prices have increased for the third consecutive month in October.
The Chinese involvement in the rising food prices
The U.S. Department of Agriculture has stated that by mid-2022 China will have 60% of the world’s rice reserves, 69% of the corn reserves, and 51% of the wheat reserves. These reserves are at a towering level and are contributing to higher global food prices.
China believes that stocking these reserves will ensure food safety for its people. China’s hoarding business has not gone down well with other countries. The Chinese government has been offering farmers minimum prices for their crops. These crops are then stockpiled which leads to rising food prices. Between 1997 and 2021, rice experienced an average inflation rate of 2.14% per year.
Meanwhile, China has no intention of giving up its stockpiles for the other countries. However, China should now adopt necessary measures to alleviate inflation. China’s inevitable role in increasing food prices should no longer be ignored. The Chinese leaders must now work together with other countries to fight food insecurity.
According to the FAO, the FAO Food Price Index has risen by more than 30% over the past year. “It has been at its highest level since 2011,” the FAO said on Thursday.
The wheat prices have surged 5% in October due to the reduced harvest from major exporters like Canada, Russia, and United States. Along with this, prices of maize, palm, soy, rice have significantly increased. Due to a shortage of migrant workers in Malaysia, palm oil prices spiked. The FAO has also mentioned a high global demand for barley, milk powder, vegetable oils, and poultry.
Rising food commodity prices are leading to higher costs for consumer goods companies. Some of these companies are passing price increases on to the consumers. Companies like, Unilever, Kraft Heinz, and Mondelez have all hiked their product prices.