The World Bank estimates that food prices have soared about 37% year-over-year, as it warns that millions of people are being pushed into poverty.
(Devex, 20th April 2022) Not only are food prices rising now, but harvests in the future could be reduced because of the spiking costs of fertilizers, World Bank President David Malpass said Tuesday. Beth Dunford, a vice president for agriculture at the African Development Bank, estimated that fertilizer prices have doubled on the African continent — and there is also a shortfall.
“We think food insecurity now is rising fastest in the middle-income countries,” Malpass said at a meeting convened by U.S. Treasury Secretary Janet Yellen on the sidelines of the Spring Meetings of the World Bank and International Monetary Fund.
He noted that for each 1 percentage point increase in food prices, the bank expects 10 million additional people to be thrown into extreme poverty. The World Bank’s “pink sheets” track commodity prices, including food.
The data is “alarming,” said Alexia Latortue, the U.S. assistant secretary for international markets and development, during the same event. Yellen’s office is convening a meeting of technical experts from international financial institutions to discuss the path ahead.
The food price issue is a key concern for those attending the Spring Meetings. At the launch of IMF’s World Economic Outlook earlier on Tuesday, Chief Economist Pierre-Olivier Gourinchas warned that the price pressure risks social unrest.
Governments in lower-income countries face reduced fiscal space to respond, with their revenue streams already strained by the COVID-19 pandemic and other shocks, including the Russian invasion of Ukraine. Still, IMF said social support to people in need is key right now but must be targeted.
“We are urging the international community to do all it can to provide funding,” Gourinchas told reporters.
Gourinchas said there is a sharply divergent global recovery from COVID-19, with lower-income nations potentially suffering “permanent scarring from the pandemic.”