Soaring food prices seem to be the recipe for trouble

A farmer harvests corn in Woodburn, Indiana, USA, October 16, 2020. REUTERS / Bing Guan

Emerging markets struggling to procure Covid-19 vaccines could have another kick in the guts: food inflation. The Food and Agriculture Organization of the United Nations (FAO) said Thursday read more that its world food price index hit its highest level since September 2011. With groceries accounting for a larger share of their inflation baskets, developing countries will be hardest hit.

In the UK, for example, food and non-alcoholic drinks account for 9% of the average family’s expenditure. In Kenya, it is a third. Combined with the sharp upward slope of the FAO chart – the increase in May was the biggest month-over-month jump since 2010 – it could spell social unrest. In 2008, the rapid tripling of rice prices from Thailand’s largest exporter sparked riots in West Africa. The cereals share of the FAO index is just below 2008 levels. But after the difficulties of the global pandemic, consumers in emerging markets will have lower tolerance levels. (By Ed Cropley)

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