More food price warnings as impact of war increases

Every week brings new warnings about global food price increases, as Russia’s invasion of Ukraine pushes up fuel, fertilizer and feed prices. The result is a surge in food price inflation, according to the United Nations.

The UN’s Food and Agricultural Organisation said the Ukraine war had raised food commodity prices to the highest levels on record.

The FAO’s food price index for March was 12.6% higher than February and 33.6% higher than March 2021. A Bloomberg report said the FAO index was rising at its fastest level yet, and the UN had warned that prices could still climb “much more”.

“The FAO’s gauge of global prices has jumped about 75% since mid-2020, eclipsing levels seen in 2008 and 2011 that contributed to global food crises,” it said.

The fact South Africa has not been as badly hit once again reaffirms FairPlay’s position that the key to national food security is through agricultural self-sufficiency, of which local poultry production is the most important component, but the worst may be yet to come.

Food price inflation has been rising steadily since late last year, and reached 6.4% in February, the latest statistics available This was before the start of the Ukraine war, and the impact of that will be seen in the coming months.

An indication of what lies ahead is given in the credible Household Affordability index produced by the Pietermaritzburg Economic Justice & Dignity Group. A report in Business Day said the organisation calculated that in March seven-member families were R1 000 short of meeting the minimum budget of about R5 300 to provide the household with a basic nutritious diet.

“There is simply not enough money around any more for these families to consistently put nutritious meals on the table,” it said.

Another reminder of why FairPlay is calling for the removal of the 15% value added tax (VAT) on the chicken portions most consumed by lower-income households.

The FAO Food Price Index (FFPI) averaged 159.3 points in March 2022, up 17.9 points (12.6 percent) from February, making a giant leap to a new highest level since its inception in 1990.
The latest increase reflects new all-time highs for vegetable oils, cereals and meat sub-indices, while those of sugar and dairy products also rose significantly.
FAO Food Price Index courtesy of the FAO.