2021 Closes with Higher Food Prices

While global food prices fell slightly in Dec. 2021, they were still markedly higher during the year than in 2020. On average, 2021’s food prices were 28.1 percent higher than the previous year’s.

According to FAO’s food price index, prices decreased month-on-month in December, with the cost of vegetable oils and sugar showing the most marked reduction, but they were significantly higher when compared to 2020. "While high prices are normally expected to lead to increased production, high input costs, the current global pandemic and conditions of increasing climate uncertainty leave little room for optimism regarding the recovery of more stable trading conditions even in 2022," said Abdolreza Abbassian, Senior Economist, FAO.

The Agricultural Market Information System's (AMIS) Market Monitor shows that basic grains saw the largest price increases, with the cost of grains and oilseeds raising by 1.2 percent month-over-month  (M/M) and 16 percent year-over-year (Y/Y), wheat by 5 percent M/M and 43.1 percent Y/Y and maize by 0.9 percent M/M and 16 percent Y/Y. On the other hand, rice and soybean prices shrank: rice by 1 percent M/M and 10.8 percent Y/Y, and soybeans 1.3 percent M/M but its cost is 4.3 percent higher Y/Y.

2021 was the year with the highest food price index, according to FAO, since 2018. Not even at their lowest point in 2021 did food prices shrank below previous years. Their highest point was reached in Nov. 2021. 

The UN also reports that the number of people living on the brink of famine continues to grow, while the rates of acute hunger skyrocketed by growing by about three million people since the beginning of 2021. "The cost of fuel has risen, food prices have skyrocketed, fertilizers are more expensive and all of this fuels new crises like the one we are experiencing," says David Beasley, Executive Director, World Food Program.

The cost to solve world hunger has also risen. By late 2021, the cost to avoid famine in the world amounted to US$7 billion, while in early 2021 it amounted to US$6.6 billion. In Latin America and the Caribbean, 13.8 million people joined the ranks of those suffering from hunger and five out of 10 people living in Mexico lack access to enough products and services to meet their basic needs, as previously mentioned by MBN.