Emma Bedford
Senior Team Lead Food & Agriculture
Food inflation - statistics & facts
Around the world, costs for consumers have been increasing and the price of food and drink is no exception; advice on how to save money when grocery shopping and cooking at home in the most developed economies worldwide is now commonplace. Despite a recent decrease in the growth of food prices, levels of food insecurity and poor nutrition may continue to rise further, helping to keep inflation at the top of the list of consumers’ biggest worries around the world in 2024.
The global food price index averaged an all-time high in March 2022 at 159.3 points. After the initial price explosion, the index began to return to levels similar to the beginning of 2022. The index had decreased to 120.4 points by May 2024. If this figure continues to decline, consumers around the world may finally begin to feel relief from rising grocery shopping costs. Secondly, the Consumer Price Index (CPI) is a key national inflation measurement tool designed to track the rise and fall in product prices which also uses weighted averages. Despite the global price index starting to drop, the picture on a national level can look quite different; a record-high CPI for food and non-alcoholic beverages was measured in April 2024 in the UK. Some Latin American countries are also feeling the pinch more than ever; the inflation rate of food prices reached an all-time high in Argentina in March 2024 at just over 308 percent.
In the 2024/2025 trade year, it was forecast that Ukraine would export 14 million metric tons of wheat, flour, and wheat products, the lowest figure on record since 2014/15. The war is likely to continue to hit Ukraine and Russia's output of all agri-food products, causing shortages and further price increases globally.
Along with the assault on Ukraine and the long-lasting global impact of the pandemic, inflated costs of energy which impact fertilizer costs used in agricultural production, blocks in trade flows, poor crop conditions, and avian flu outbreaks are other factors in pushing up the cost of basic food staples. For example, the impact of avian flu can be seen in the increase in the price of eggs in the United States. Between December 2021 and 2022, eggs were the hardest-hit grocery product with a year-over-year increase in CPI of 32.2 percent. However, in February 2024, the year-over-year inflation rate of eggs in the U.S. decreased by almost 29 percent, showing how quickly the market can bounce back after a short-term crisis.
How are changes in food prices measured?
Indexes are a useful tool for gauging price increases across categories. The FAO Food Price Index (FFPI) measures the change in global prices of a basket of food products by comparing current prices against a weighted average of one hundred. The index tracks the most traded food commodities: meat, dairy, cereals, vegetable oils, and sugar.The global food price index averaged an all-time high in March 2022 at 159.3 points. After the initial price explosion, the index began to return to levels similar to the beginning of 2022. The index had decreased to 120.4 points by May 2024. If this figure continues to decline, consumers around the world may finally begin to feel relief from rising grocery shopping costs. Secondly, the Consumer Price Index (CPI) is a key national inflation measurement tool designed to track the rise and fall in product prices which also uses weighted averages. Despite the global price index starting to drop, the picture on a national level can look quite different; a record-high CPI for food and non-alcoholic beverages was measured in April 2024 in the UK. Some Latin American countries are also feeling the pinch more than ever; the inflation rate of food prices reached an all-time high in Argentina in March 2024 at just over 308 percent.
What causes food price rises?
According to the aforementioned global food price index, prices began to rise in the early summer of 2020. The economic impacts of COVID-19 lockdowns worldwide, such as product and labor shortages, started to show their faces around this time. Things took a turn for the worse early in 2022; between January 2022 and March 2022 alone, coinciding with the Russian invasion of Ukraine in February 2022, figures increased by over 17 percent. Both Russia and Ukraine are responsible for a large share of global trade in essential agricultural commodities.In the 2024/2025 trade year, it was forecast that Ukraine would export 14 million metric tons of wheat, flour, and wheat products, the lowest figure on record since 2014/15. The war is likely to continue to hit Ukraine and Russia's output of all agri-food products, causing shortages and further price increases globally.
Along with the assault on Ukraine and the long-lasting global impact of the pandemic, inflated costs of energy which impact fertilizer costs used in agricultural production, blocks in trade flows, poor crop conditions, and avian flu outbreaks are other factors in pushing up the cost of basic food staples. For example, the impact of avian flu can be seen in the increase in the price of eggs in the United States. Between December 2021 and 2022, eggs were the hardest-hit grocery product with a year-over-year increase in CPI of 32.2 percent. However, in February 2024, the year-over-year inflation rate of eggs in the U.S. decreased by almost 29 percent, showing how quickly the market can bounce back after a short-term crisis.
