RISING FOOD PRICES: A RECIPE FOR HUNGER

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On July 12, the FAO (Food and Agriculture Organization of the United Nations) presented a report called “The state of food security and nutrition in the world 2021”1. According to this, throughout the past year -the first year of the pandemic – hunger soared, outpacing population growth. Last year 9.9% of people suffered from malnutrition, compared to 8.4% in 2019, increasing by 161 million the number of people who suffered from hunger compared to the previous year. The reason for this is clear: The increase in food prices, a trend that has not stopped in 2021.

What is the reason for this increase in prices? Unsurprisingly, the increase is related to the pandemic. On the one hand, there is an increase in global demand for food, with some countries following grain accumulation strategies2. On the other hand, suppliers have been affected by interruptions in production, labor and transport, with factors as decisive as the increase in the price of fuel3 or the shortage of semiconductor chips for trucks in some regions. Therefore, maritime freight rates, measured by the Baltic Dry Index4, have increased between 2 and 3 times in the last 12 months.

The combination of high demand with low production leads to rising inflation as economies emerge from the restrictions imposed by the pandemic. In Spain, according to data from the INE5 (National Statistics Institute), the prices of fresh food rose 2.6% compared to March and packaged food 0.7%. The largest increases occurred in fresh legumes and vegetables (monthly rate of 10.4%), followed by fresh seafood (3.5%), fresh fish (2.7%) and potatoes (2.6%). As expected, the effects of the pandemic on the economy will make it necessary to obtain large quantities of food at low cost to nourish food banks, given the 50% increase in these services due to the situation of poverty and necessity for a large part of the population6.

What can we expect in the near future? According to the International Monetary Fund, the price of food in 2021 could increase even more, by 25%, compared to 20207. In some cases it has been accused of speculative movements that artificially manipulated the values of food8. Be that as it may, we are in an uncertain time, in the prelude to one of the deepest economic crises in human history. It is in our power that the crisis is not resolved like so many others, with the populations taking the worst part. Only mobilization from the base can force a fairer distribution that achieves sustained food security over time.

1 http://www.fao.org/news/story/en/item/1415595/icode/
2 https://www.eleconomista.es/economia/noticias/11283305/06/21/China-deja-de-acaparar-materias-primas-para-intentar-pinchar-la-burbuja-de-inflacion.html
3 https://elpais.com/economia/2021-07-22/el-aumento-del-precio-de-la-gasolina-merma-las-ventas-de-las-gasolineras.html
4 https://www.bloomberg.com/quote/BDIY:IND
5 https://www.ine.es/covid/covid_inicio.htm
6 https://www.eldiario.es/sociedad/pandemia-aumenta-demanda-ayuda-bancos-alimentos-50_1_7834744.html
7 https://www.mcezone.com/inflation-news-why-is-imf-worried-about-rising-food-prices-why-is-the-imf-worried-about-rising-food-prices/
8 https://www.upa.es/upa/noticias-upa/movimientos-especulativos-hundir-precio-fruta/2020/3342/

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