Latest Update – October 2, 2023
Domestic food price inflation remains high around the world. Information from the latest month between May and August 2023 for which food price inflation data are available shows high inflation in many low- and middle-income countries, with inflation higher than 5% in 52.6% of low-income countries, 86.4% of lower-middle-income countries, and 64% of upper-middle-income countries with many experiencing double-digit inflation. In addition, 69.6% 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 (measured as year-on-year change in the overall consumer price index) in 79.4% of the 165 countries for which food CPI and overall CPI indexes are both available.
The agricultural and export price indices closed 1% and 2% lower, respectively, than two weeks ago; while the cereal price index closed 2% higher. Rice and wheat prices, which closed 6% and 2% higher, respectively, than two weeks ago, have driven the increase in the cereal price index. On a year-on-year basis, maize and wheat prices are 29% and 31% lower, respectively, although rice prices continue their rising trend and are currently 38% higher. Compared to January 2021, maize prices are 7% lower, wheat prices are 10% lower, while rice prices are 23% higher (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
The midpoint assessment of the 2030 Agenda for Sustainable Development underscores concerns regarding the achievement of food- and agriculture-related Sustainable Development Goals in the face of multiple crises, including the COVID-19 pandemic, climate change, and armed conflicts, which are threatening global progress in eradicating poverty, improving food security and nutrition, and enhancing health. The Food and Agriculture Organization estimates that between 691 million and 783 million people were hungry globally in 2022, effectively erasing progress made since 2015. In addition, food insecurity rose from 25.3% in 2019 to 29.6% in 2022, with severe food insecurity affecting 11.3% of the global population. This translates to 180 million more people facing severe food insecurity than in 2019. In 2022, 27.8% of women and 25.4% of men globally experienced moderate or severe food insecurity. Although there has been a slight narrowing of the global gender gap in food insecurity, the outlook remains poor.
There have been significant disturbances in trade in global food and agricultural markets, including India’s recent ban on rice exports and trade restrictions caused by Russia's invasion of Ukraine, sparking concerns regarding food security, price unpredictability, and the ability of the global trade system to withstand such challenges. The global rice market has experienced significant turbulence since India, the world's leading rice exporter, began implementing a series of export restrictions in July, including a ban on milled white rice exports, an export tax on parboiled rice, and the establishment of a minimum export price for basmati rice. India's dominance as the lowest-priced white rice supplier, especially to Sub-Saharan Africa since 2020, has raised concerns about the potential impact of significantly higher rice prices on this import-dependent region. Trade restrictions have also disrupted the fertilizer industry over the past year. The invasion of Ukraine increased not only fertilizer prices, but also grain prices, reaching a peak in May 2022. Easing export restrictions and sanctions, along with the partial reopening of transit through the Black Sea, helped stabilize grain markets.
The new Global Report on Food Crises 2023 Mid-Year Update shows that 238 million people across 48 countries are facing acute food and nutrition insecurity. Nine countries experienced an increase in acute food insecurity since 2022. Sudan was particularly affected, with an increase of 8.6 million acutely food-insecure people (74%). Burundi and Somalia experienced an increase of 1 million people each, increasing the acutely food insecure population by 65% and 18%, respectively. There are three major drivers of food insecurity in 2023, including conflict, economic challenges, and climate-induced weather extremes.
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 September 25, 2023, 19 countries have implemented 25 food export bans, and 7 have implemented 12 export-limiting measures.
World Bank Action
In May 2022, the World Bank made a commitment of making available $30 billion over a period of 15 months to tackle the crisis. We have surpassed that goal. The World Bank has scaled up its food and nutrition security response, to now making $45 billion available through a combination of $22 billion in new lending and $23 billion from existing portfolio.
Our food and nutrition security portfolio now spans across 90 countries. It includes both short term interventions such as expanding social protection, also longer-term resilience such as boosting productivity and climate-smart agriculture.
The Bank's intervention is expected to benefit 335 million people, equivalent to 44% of the number of undernourished people. Around 53% of the beneficiaries are women – they are disproportionately more affected by the 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 2022, 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: Oct 02, 2023