USA- According to the World bank’s latest food security update for Q1 2024, prices of basic commodities in most middle and low-income countries remain high despite a reduction in prices of agricultural commodities over the past year.
The lender revealed inflation remained fairly high- higher than 5% in 14.5% of high income countries, 31% of upper middle income countries, 63% of lower middle income countries and 59% in low income countries.
The World bank also revealed food price inflation exceeded general inflation in 53% of 166 countries, despite a general decline in agricultural commodity prices.
According to the food security update, the food price inflation index declined by 4% in Q1 2024, which is 9% lower than the previous year. Food sub-components like oils, meals and grains experienced a 5% price decline in Q1 2024.
These price declines were attributed by competitive pricing from harvests in the Black Sea region as well as increased production by major global exporters.
However, these price reductions have not been replicated in the retail and grocery industries. This is mostly because five major food categories are responsible for the sustained food price inflation- veal and beef, non-frozen food, poultry, non-carbonated drinks, fresh produce and snacks.
Prices remained high in these categories because of supply chain issues, specially for those that require some form of value addition. Inputs, machinery and higher transport costs have contributed to the sustained high prices of food commodities, especially for importers charged with import duty. They remain high because of the core inflation pressures.
The food security update highlights African countries as the most affected by high inflation, significantly affecting their spending habits and overall demand.
“African countries are among the most affected with food price inflation, which exceeds the overall inflation in most of the surveyed countries,” the lender said in a statement.
According to the update, there is a need among food industry players in middle and low income countries to enhance their supply chain capabilities. This will ensure faster and more efficient movement of goods, which would help to offset energy costs.
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