Latest Update – July 5, 2023
Domestic food price inflation remains high around the world. Information from the latest month between February 2023 and May 2023 for which food price inflation data are available shows high inflation in most low- and middle-income countries, with inflation higher than 5% in in 61.1% of low-income countries, 81.4% of lower-middle-income countries, and 77% of upper-middle-income countries, with many experiencing double-digit inflation. In addition, 80.4% of high-income countries are experiencing high food price inflation. The most-affected countries are in Africa, North America, Latin America, South Asia, Europe, and Central Asia. In real terms, food price inflation exceeded overall inflation in 83.2% from 161 countries where data is available.
The agricultural and cereal price indices closed 1% and 3% higher, respectively, while export price indices closed 5% lower than two weeks ago. Prices of wheat, rice, and maize all saw an increase and closed 8%, 1%, and 2% higher, respectively, compared to two weeks ago. On a year-on-year basis, maize and wheat prices are 18% and 34% lower, respectively, while rice prices are 11% higher. Maize, wheat, and rice prices are 21%, 4%, and 2% higher, respectively, than in January 2021. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
The most recent Joint Child Malnutrition Estimates for 2022 indicate that the World Health Assembly and Sustainable Development Goal (SDG) 2 (zero hunger) targets for 2030 are moving further out of reach. The new joint child malnutrition estimates reveal that 148.1 million children under 5 were stunted in 2022, which is equivalent to one in five children in this age group worldwide. Although data gaps prevented assessment of wasting in Europe and Central Asia, the data indicate that the rate of wasting increased somewhat from 2020 to 2022 globally, with South Asia continuing to have a disproportionate number of wasted children. In addition to stunting and wasting rates, overweight and obesity rates for children under 5 have been slowly rising, widening the gap between the current trajectory and the SDG target of reducing overweight rates to less than 3% by 2030; 37 million children are overweight globally—almost 4 million more than in 2000.
Urgent action is crucial to combat all forms of malnutrition, especially climate-smart action. Without this, gaps between trajectories and SDG goals will continue to widen. Strategies that include expanding high-impact interventions, fiscal policies, marketing regulations, and labeling of unhealthy foods should be considered to address undernutrition and obesity simultaneously.
It is estimated that hunger levels have risen sharply around the world. According to the latest World Bank analysis of FAO data and a model that leverages the IMF World Economic Outlook, projections for the future outlook of global hunger suggest that hunger will persist. Additional devastating effects from extreme weather events and conflict are likely to drive many countries into crisis. This year, as many as 1 billion people—one in eight—globally have had severe difficulty obtaining food and have had to skip meals as a result. After a decade of consistent development gains, global hunger has increased sharply in recent years. It is likely that the number of severely food-insecure individuals will have increased by more than 220 million between 2019 and the end of 2023, primarily fueled by conflict, climate change, and economic shocks worsened by the COVID-19 pandemic.
The recent Medium-Term Fertilizer Outlook 2023-2027 from the International Fertilizer Association (IFA) expects global fertilizer use to recover by 4 percent to 192.5 Mt, just above the FY 2019 level of 191.8 Mt. IFA survey results indicate that affordability will be one of the many drivers of fertilizer consumption in the medium term, although other factors such as climate change and water availability, the international geopolitical situation, government regulations, government support to farmers, national macroeconomics, and fertilizer availability have gained importance. The medium-term forecast is that South Asia and Latin America will be the largest global source of demand for fertilizer, although Africa is expected to be the fastest-growing market. The evolving geopolitical situation in Ukraine is the greatest risk. As such, the outlook assumes a progressive recovery, but any deviation from the trend would affect fertilizer consumption not only in Ukraine, but also globally.
The latest FAO Food Outlook points to increases in production and higher closing stocks of several basic foodstuff, but global food production systems remain vulnerable to extreme weather events, geopolitical tensions, policy changes, and developments in other (non-food) markets. The report also highlights major policy developments from mid-October 2022 to mid-May 2023 affecting markets for grains, rice, meat, and dairy products.
Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. The global food crisis has been partially made worse by the growing number of food trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices. As of June 5, 2023, twenty countries have implemented 27 food export bans, and 10 have implemented 14 export-limiting measures.
World Bank Action
As part of a comprehensive, global response to the food security crisis, in April 2022 the World Bank announced that it is making up to $30 billion available over a period of 15 months, including $12 billion in new projects. The financing is to scale up short- and long-term responses along four themes to boost food and nutrition security, reduce risks, and strengthen food systems: (i) support producers and consumers, (ii) facilitate increased trade in food and trade inputs, (iii) support vulnerable households, and (iv) invest in sustainable food and nutrition security.
The Bank has achieved its target of making $30 billion commitment for food and nutrition security response. Between April to December 2022, the Bank’s food and nutrition security commitments in new lending have passed the $12 billion mark – with almost half for Africa, which is one of the hardest hit regions by the food crisis. Some examples include:
- The $766 million West Africa Food Systems Resilience Program is working to increase preparedness against food insecurity and improve the resilience of food systems in West Africa. The program is increasing digital advisory services for agriculture and food crisis prevention and management, boosting adaption capacity of agriculture system actors, and investing in regional food market integration and trade to increase food security. An additional $345 million is currently under preparation for Senegal, Sierra Leone and Togo.
- A $150 million grant for the second phase of the Yemen Food Security Response and Resilience Project, which will help address food insecurity, strengthen resilience and protect livelihoods.
- $50 million grant of additional financing for Tajikistan to mitigate food and nutrition insecurity impacts on households and enhance the overall resilience of the agriculture sector.
- A $125 million project in Jordan aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
- A $300 million project in Bolivia that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
- A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness against food insecurity and to improve the resilience of their food systems.
- A $500 million Emergency Food Security and Resilience Support Project to bolster Egypt's efforts to ensure that poor and vulnerable households have uninterrupted access to bread, help strengthen the country's resilience to food crises, and support to reforms that will help improve nutritional outcomes.
- A $130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production and seeds for smallholder farmers for the upcoming planting season.
- The $2.3 billion Food Systems Resilience Program for Eastern and Southern Africa, helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. The program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.
In May, the World Bank Group and the G7 Presidency co-convened the Global Alliance for Food Security, which aims to catalyze an immediate and concerted response to the unfolding global hunger crisis. The Alliance has developed the publicly accessible Global Food and Nutrition Security Dashboard, which provides timely information for global and local decision-makers to help improve coordination of the policy and financial response to the food crisis.
The heads of the FAO, IMF, World Bank Group, WFP, and WTO released a Third Joint Statement on February 8, 2023. The statement calls to prevent a worsening of the food and nutrition security crisis, further urgent actions are required to (i) rescue hunger hotspots, (ii) facilitate trade, improve the functioning of markets, and enhance the role of the private sector, and (iii) reform and repurpose harmful subsidies with careful targeting and efficiency. Countries should balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.
Last Updated: Jul 05, 2023