Food inflation remains high worldwide and there is immense volatility in the global grain market, despite a deal with Russia that has allowed some Ukrainian agricultural shipments to head overseas, the World Bank said in an update released on Monday.
For countries dependent on grain imports, especially low-income countries, the high prices remain a risk to stability and food security. The bank noted that experts are still “cautious” about the July 22 shipping deal, adding to uncertainty.
In numbers: Across nearly all low-income and middle-income countries, inflation levels remain above 5%, with many experiencing double-digit inflation.
Prices for wheat, maize, and rice are elevated versus levels seen before the Russian invasion of Ukraine, though they have moderated and stabilized in recent weeks. Taking a longer view, compared to January 2021, maize and wheat price indices are 20% higher, though rice has dropped sharply.
Production: There are signs of improvement in weather conditions in the Northern Hemisphere, which is helping current wheat production after a rough winter harvest. Maize yields, though, are expected to be 1.2% below last year, partly due to droughts in Latin America.
The bank has warned that a key impediment remains trade restrictions on food and fertilizers, with more than 100 restrictive trade measures in place across dozens of countries.
Fertilizer woes: The high cost of fertilizer, as well as availability, has been a drag on food prices and production. The bank noted that even with recent declines in prices the cost remains more than three times as high as two years ago.
Another concern is fertilizer overuse — a recent World Bank analysis found that “rich countries consume 100 kilograms of fertilizers per hectare, nearly twice as much as developing countries.” In sub-Saharan Africa, farmers use just 15 kilograms per hectare on average.
About the author
Shabtai Gold
Shabtai Gold is a Senior Reporter based in Washington. He covers multilateral development banks, with a focus on the World Bank, along with trends in development finance. Prior to Devex, he worked for the German Press Agency, dpa, for more than a decade, with stints in Africa, Europe, and the Middle East, before relocating to Washington to cover politics and business.
