Latest Update – March 4, 2024
Domestic food price inflation remains high. Inflation higher than 5% is experienced in 60% of low-income countries (an increase of 2.1 percentage points since the last update on February 15, 2024), 66% of lower-middle-income countries (5.7 percentage points lower), 50% percent of upper-middle-income countries (2.0 percentage points higher), and 36.4% of high-income countries (9.1 percentage points lower). In real terms, food price inflation exceeded overall inflation in 71% of the 167 countries where data is available.
The agricultural price index closed at the same level as two weeks ago, the cereal price index closed 5% lower, and the export price index closed 5% higher. Increases in cocoa (11%) and cotton (4%) drove the increase in the export price index. Compared to two weeks ago, maize, wheat, and rice prices closed 9%, 5%, and 1% lower, respectively. On a year-on-year basis, maize prices are 37% lower, wheat prices 22% lower, and rice prices 26% higher. Maize prices are 2% higher than in January 2020, wheat prices 1% higher, and rice prices 50% higher (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
The International Food Policy Research Institute (IFPRI) details the continuing repercussions of India's export restrictions on rice. The restrictions, implemented with the intention of stabilizing domestic prices, are still affecting global rice markets half a year later. The benchmark Thai white rice price has surged by 22% since India initiated its ban on non-basmati white rice exports in July 2023, disrupting global supplies. This situation has particularly affected importing countries in South and Southeast Asia and sub-Saharan Africa, compelling them to seek alternative sources amidst production losses that El Niño is causing in other major rice-exporting nations such as Viet Nam and Thailand.
A recent flagship report from the UN Food and Agriculture Organization (FAO) highlights the staggering economic toll of disasters on agricultural and agrifood systems, estimating a total loss of approximately $3.8 trillion in agricultural production over the last 30 years. This equates to an average annual loss of $123 billion, equivalent to 5% of global agricultural GDP. The report underscores that low- and lower-middle-income countries have been impacted the most severely, with disasters inflicting losses ranging between 10-15% of their agricultural GDP. The impacts extend beyond economic losses, with significant implications for food security and livelihoods, particularly in vulnerable regions such as small island developing states.
As highlighted in a recent blog, the World Bank Food Price Index declined noticeably in 2023, averaging 9% lower for the year than in 2022. Despite this decrease, inflation-adjusted food prices in 2023 remained comparable with price spikes observed in 2007/08 and 2011/12. The primary reason for the fall in food prices was robust harvests, which helped counteract ongoing challenges such as El Niño, trade restrictions, and nonrenewal of the Black Sea Grain Initiative. It is anticipated that global food prices will further ease in 2024 and 2025, by 2 and 3%, respectively, because of increases in global supply, although risks persist, such as further El Niño developments, macroeconomic conditions, and trade restrictions.
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 February 26, 2024, 16 countries have implemented 23 food export bans, and 8 have implemented 15 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:
- In Honduras, the Rural Competitiveness Project series (COMRURAL II and III) aims to generate entrepreneurship and employment opportunities while promoting a climate-conscious, nutrition-smart strategy in agri-food value chains. To date, the program is benefiting around 6,287 rural small-scale producers (of which 33% are women, 15% youth, and 11% indigenous) of coffee, vegetables, dairy, honey, and other commodities through enhanced market connections and adoption of improved agricultural technologies and has created 6,678 new jobs.
- In Honduras, the Corredor Seco Food Security Project (PROSASUR) strives to enhance food security for impoverished and vulnerable rural households in the country’s Dry Corridor. This project has supported 12,202 extremely vulnerable families through nutrition-smart agricultural subprojects, food security plans, community nutrition plans, and nutrition and hygiene education. Within the beneficiary population, 70% of children under the age of five and their mothers now have a dietary diversity score of at least 4 (i.e., consume at least four food groups).
- The $2.75 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. Now in phase three, 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.
- A $95 million credit from IDA for the Malawi Agriculture Commercialization Project (AGCOM) to increase commercialization of select agriculture value chain products and to provide immediate and effective response to an eligible crisis or emergency.
- The $200 million IDA grant for Madagascar to strengthen decentralized service delivery, upgrade water supply, restore and protect landscapes, and strengthen the resilience of food and livelihood systems in the drought-prone ‘Grand Sud’.
- A $60 million credit for the Integrated Community Development Project that works with refugees and host communities in four northern provinces of Burundi to improve food and nutrition security, build socio-economic infrastructure, and support micro-enterprise development through a participatory approach.
- The $175 million Sahel Irrigation Initiative Regional Support Project is helping build resilience and boost productivity of agricultural and pastoral activities in Burkina Faso, Chad, Mali, Mauritania, Niger, and Senegal. More than 130,000 farmers and members of pastoral communities are benefiting from small and medium-sized irrigation initiatives. The project is building a portfolio of bankable irrigation investment projects of around 68,000 ha, particularly in medium and large-scale irrigation in the Sahel region.
- Through the $50 million Emergency Food Security Response project, 329,000 smallholder farmers in Central Africa Republic have received seeds, farming tools and training in agricultural and post-harvest techniques to boost crop production and become more resilient to climate and conflict risks.
- The $15 million Guinea Bissau Emergency Food Security Project is helping increase agriculture production and access to food to vulnerable families. Over 72,000 farmers have received drought-resistant and high-yielding seeds, fertilizers, agricultural equipment; and livestock vaccines for the country-wide vaccination program. In addition, 8,000 vulnerable households have received cash transfer to purchase food and tackle food insecurity.
- The $60 million Accelerating the Impact of CGIAR Research for Africa (AICCRA) project has reached nearly 3 million African farmers (39% women) with critical climate smart agriculture tools and information services in partnership with the Consortium of International Agricultural Research Centers (CGIAR). These tools and services are helping farmers to increase production and build resilience in the face of climate crisis. In Mali, studies showed that farmers using recommendations from the AICCRA-supported RiceAdvice had on average 0.9 ton per hectare higher yield and US$320 per hectare higher income.
- 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.
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: Mar 04, 2024