Worries about the food crisis are spreading around the world. The Nihon Keizai Shimbun reported on the 17th that the food early warning system has turned red because of the excessive fluctuation of major global food prices.
The International Food Policy Research Institute of the United States divides the daily changes in world major food prices into three levels in order of magnitude: "red, orange, and green". After June this year, several staple foods and oil products such as wheat, corn, soybeans, and rice have all lit up a "red light" of excessive price fluctuations. By the beginning of September, the red light had been on for longer than that from March to May 2022, soon after the Russia-Ukraine conflict broke out, setting a new record. The rice price index in August reached its highest point in 15 years, while the Food and Agriculture Organization of the United Nations (FAO) food price index, which serves as a food price indicator, fell 2.6 points month on month to 121.4 points in August, the lowest level since March 2021.
The Nihon Keizai Shimbun said that under the circumstances of large price fluctuations and uncertain profit prospects, it is difficult for farmers to judge when and how much to produce. Enterprises' investment in agriculture has also become negative, easily affecting production and exacerbating the risk of food shortages.
HSBC Global Research Chief Asia Economist Newman recently warned that the surge in rice prices is similar to the 2008 Asian food crisis. As consumers and governments scramble to ensure supply, the rise in rice prices in some economies quickly spreads to other markets, pushing up the prices of other agricultural products such as wheat.
The head of a large Japanese business office told Nihon Keizai Shimbun that if the impact of inflation, instability of the world situation, abnormal weather and other conditions are taken into account, high price volatility may become the norm.
The 2023 Global Food Crisis Report released by the Food and Agriculture Organization of the United Nations points out that the combination of conflict and insecurity, domestic and global economic shocks, and extreme weather has led to a spiral effect, exacerbating the food supply crisis, and there is currently no evidence that these adverse factors will alleviate in 2023.
The Namibian Daily analyzed that there are four ways to solve the global food price crisis. Firstly, maintain the openness of grain trade. Countries and international organizations must unite and work together to fulfill their commitment to maintaining smooth food circulation. Secondly, support consumers and vulnerable families through safety nets. Maintain and expand social protection plans to cushion the impact of the crisis on consumers, especially for the protection of people in low-income and middle-income countries. Once again, support farmers, help grain producers cope with various issues such as increased costs, and ensure harvests. At the same time, adjust public policies and expenditures to better support farmers. Finally, efforts must be made to promote the transformation of the food system and develop and cultivate more drought resistant and resilient food crops. The most important thing is to persist in helping developing countries get back on track.
