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Domestic food price inflation remains high in many low- and middle-income countries. Inflation higher than 5% is experienced in 59.1% of low-income countries (no change since the last update on May 30, 2024), 63% of lower-middle-income countries (no change), 36% of upper-middle-income countries (5.0 percentage points higher), and 10.9 percent of high-income countries (3.6 percentage points lower). In real terms, food price inflation exceeded overall inflation in 46.7% of the 167 countries where data is available.
Since the last update on May 30, 2024, the agricultural, cereal, and export price indices closed 8%, 10%, and 9% lower, respectively. A fall in cocoa (16%) and cotton (11%) prices drove the decrease in the export price index. Maize and wheat prices closed 8% and 23% lower, respectively, and rice closed at the same level. Maize prices are 28% lower, wheat prices 8% higher, and rice prices 18% higher on a year-on-year basis. Maize prices are 10% higher, wheat prices 5% lower, and rice prices 46% higher than in January 2020. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
In the latest Hunger Hotspots report covering the period between June and October 2024, the Food and Agriculture Organization (FAO) and World Food Programme (WFP) have issued a joint warning about the escalating food insecurity crisis in 18 critical hotspots comprising 17 countries or territories and one regional cluster. Mali, the Palestinian Territories, South Sudan, and Sudan are of the highest concern, and Haiti is newly added because of escalating violence by non-state armed groups. These areas are experiencing famine or are at severe risk, requiring urgent action to prevent catastrophic conditions. The report emphasizes the critical need for expanded humanitarian assistance in all 18 hotspots to protect livelihoods and increase access to food. Early intervention is crucial to mitigate food gaps and prevent further deterioration into famine conditions. The international community is urged to invest in integrated solutions that address the multifaceted causes of food
insecurity, ensuring sustainable support beyond emergency responses to build resilience and stability in affected regions.
A new report from the Integrated Food Security Phase Classification (IPC) confirms that the food insecurity situation in Gaza continues to be catastrophic. High risk of famine will persist across the whole Gaza Strip as long as conflict continues, and humanitarian access is restricted. The report finds that 96% of the population, equivalent to 2.15 million people, face acute food insecurity (IPC Phase 3 or above), with 495,000 individuals experiencing catastrophic levels of food insecurity (IPC Phase 5) through September 2024. The gravity of the situation is a reminder of the urgent need to make sure food and other supplies reach all people in Gaza. Only cessation of hostilities in conjunction with sustained humanitarian access to the entire Gaza Strip can reduce the risk of famine occurring in the Gaza Strip, the report argues.
The AMIS Market Monitor for June 2024 highlights the initial forecasts for global cereal production released in May, underscoring significant uncertainty because planting of many crops is pending in the Northern hemisphere. The report scrutinizes the validity of early projections for 2024/25 wheat production, now challenged by adverse weather conditions such as drought and prolonged frost in key Russian regions that affect yield expectations. Consequently, world wheat export prices rose in May, driven by mounting concerns over production constraints, particularly in the Black Sea region. Given wheat's critical role as a staple food with limited substitutes, importing nations are closely monitoring developments for potential impacts on food security.
Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. The global food crisis has been partially made worse by the growing number of food and fertilizer trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices. As of June 26, 2024, 16 countries have implemented 22 food export bans, and 8 have implemented 15 export-limiting measures.
World Bank Action
In May 2022, the World Bank made a commitment of making available $30 billion over a period of 15 months to tackle the crisis. We have surpassed that goal. The World Bank has scaled up its food and nutrition security response, to now making $45 billion available through a combination of $22 billion in new lending and $23 billion from existing portfolio.
Our food and nutrition security portfolio now spans across 90 countries. It includes both short term interventions such as expanding social protection, also longer-term resilience such as boosting productivity and climate-smart agriculture.
The Bank's intervention is expected to benefit 335 million people, equivalent to 44% of the number of undernourished people. Around 53% of the beneficiaries are women – they are disproportionately more affected by the crisis. Some examples include:
- In Honduras, the Rural Competitiveness Project series (COMRURAL II and III) aims to generate entrepreneurship and employment opportunities while promoting a climate-conscious, nutrition-smart strategy in agri-food value chains. To date, the program is benefiting around 6,287 rural small-scale producers (of which 33% are women, 15% youth, and 11% indigenous) of coffee, vegetables, dairy, honey, and other commodities through enhanced market connections and adoption of improved agricultural technologies and has created 6,678 new jobs.
- In Honduras, the Corredor Seco Food Security Project (PROSASUR) strives to enhance food security for impoverished and vulnerable rural households in the country’s Dry Corridor. This project has supported 12,202 extremely vulnerable families through nutrition-smart agricultural subprojects, food security plans, community nutrition plans, and nutrition and hygiene education. Within the beneficiary population, 70% of children under the age of five and their mothers now have a dietary diversity score of at least 4 (i.e., consume at least four food groups).
- The $2.75 billion Food Systems Resilience Program for Eastern and Southern Africa, helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. Now in phase three, the program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.
- A $95 million credit from IDA for the Malawi Agriculture Commercialization Project (AGCOM) to increase commercialization of select agriculture value chain products and to provide immediate and effective response to an eligible crisis or emergency.
- The $200 million IDA grant for Madagascar to strengthen decentralized service delivery, upgrade water supply, restore and protect landscapes, and strengthen the resilience of food and livelihood systems in the drought-prone ‘Grand Sud’.
- A $60 million credit for the Integrated Community Development Project that works with refugees and host communities in four northern provinces of Burundi to improve food and nutrition security, build socio-economic infrastructure, and support micro-enterprise development through a participatory approach.
- The $175 million Sahel Irrigation Initiative Regional Support Project is helping build resilience and boost productivity of agricultural and pastoral activities in Burkina Faso, Chad, Mali, Mauritania, Niger, and Senegal. More than 130,000 farmers and members of pastoral communities are benefiting from small and medium-sized irrigation initiatives. The project is building a portfolio of bankable irrigation investment projects of around 68,000 ha, particularly in medium and large-scale irrigation in the Sahel region.
- Through the $50 million Emergency Food Security Response project, 329,000 smallholder farmers in Central Africa Republic have received seeds, farming tools and training in agricultural and post-harvest techniques to boost crop production and become more resilient to climate and conflict risks.
- The $15 million Guinea Bissau Emergency Food Security Project is helping increase agriculture production and access to food to vulnerable families. Over 72,000 farmers have received drought-resistant and high-yielding seeds, fertilizers, agricultural equipment; and livestock vaccines for the country-wide vaccination program. In addition, 8,000 vulnerable households have received cash transfer to purchase food and tackle food insecurity.
- The $60 million Accelerating the Impact of CGIAR Research for Africa (AICCRA) project has reached nearly 3 million African farmers (39% women) with critical climate smart agriculture tools and information services in partnership with the Consortium of International Agricultural Research Centers (CGIAR). These tools and services are helping farmers to increase production and build resilience in the face of climate crisis. In Mali, studies showed that farmers using recommendations from the AICCRA-supported RiceAdvice had on average 0.9 ton per hectare higher yield and US$320 per hectare higher income.
- The $766 million West Africa Food Systems Resilience Program is working to increase preparedness against food insecurity and improve the resilience of food systems in West Africa. The program is increasing digital advisory services for agriculture and food crisis prevention and management, boosting adaption capacity of agriculture system actors, and investing in regional food market integration and trade to increase food security. An additional $345 million is currently under preparation for Senegal, Sierra Leone and Togo.
- A $150 million grant for the second phase of the Yemen Food Security Response and Resilience Project, which will help address food insecurity, strengthen resilience and protect livelihoods.
- $50 million grant of additional financing for Tajikistan to mitigate food and nutrition insecurity impacts on households and enhance the overall resilience of the agriculture sector.
- A $125 million project in Jordan aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
- A $300 million project in Bolivia that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
- A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness against food insecurity and to improve the resilience of their food systems.
- A $500 million Emergency Food Security and Resilience Support Project to bolster Egypt's efforts to ensure that poor and vulnerable households have uninterrupted access to bread, help strengthen the country's resilience to food crises, and support to reforms that will help improve nutritional outcomes.
- A $130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production and seeds for smallholder farmers for the upcoming planting season.
In May 2022, the World Bank Group and the G7 Presidency co-convened the Global Alliance for Food Security, which aims to catalyze an immediate and concerted response to the unfolding global hunger crisis. The Alliance has developed the publicly accessible Global Food and Nutrition Security Dashboard, which provides timely information for global and local decision-makers to help improve coordination of the policy and financial response to the food crisis.
The heads of the FAO, IMF, World Bank Group, WFP, and WTO released a Third Joint Statement on February 8, 2023. The statement calls to prevent a worsening of the food and nutrition security crisis, further urgent actions are required to (i) rescue hunger hotspots, (ii) facilitate trade, improve the functioning of markets, and enhance the role of the private sector, and (iii) reform and repurpose harmful subsidies with careful targeting and efficiency. Countries should balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.
The U.N. Food and Agriculture Organization's price index, which tracks the most globally traded food commodities, averaged 120.6 points in June, unchanged from May. The May figure was revised from an initial reading of 120.4.
The FAO index hit a three-year low in February as food prices receded from a record peak set in March 2022 following Russia's invasion of Ukraine.
The June reading was 2.5% down from a year earlier and 24.8% below its 2022 high.
Cereal prices fell 3.0% month on month amid slightly improved production prospects in some major exporting countries, including Kazakhstan and Ukraine, the FAO said.
Maize export prices also dropped, with production in Argentina and Brazil expected to be larger than earlier thought.
Dairy prices rose 1.2% in June from May, while the sugar index rose 1.9%, lifted in part by lower-than-expected harvest results in May in Brazil, the FAO said.
Vegetable oil prices jumped 3.1%, buoyed by higher quotations for palm, soy and sunflower oils, while rapeseed oil prices remained virtually unchanged.
Meat prices were also stable, with a fall in international poultry prices but slight increases in the prices of ovine, pig and bovine meats.
In a separate report, the FAO raised its forecast for global cereal production in 2024 by 7.9 million metric tons (+0.3%), putting it at 2.854 billion tons, up fractionally from 2023 levels and marking a new all-time high forecast.
The increase reflected improved prospects for coarse grains, which were bolstered by higher expectations for maize harvests in Argentina and Brazil.
The forecast for world cereal utilisation in the 2024/25 period stood at 2.856 billion tons, up 0.5% on 2023/24, while the FAO's forecast for world cereal stocks by the close of seasons in 2025 stood at 894 million tons.
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