For a decade, global food prices have not risen so intensively monthly as in the last year. According to experts, the extraordinary price increase can obstruct the rapid economic recovery expected in the post-Covid period and accelerate inflation.
The FAO food price index, a specialised agency of the United Nations for food and agriculture, monitors food price developments worldwide of a wide range of products, including cereals, oilseeds, dairy products, meat and sugar. According to the measurements in May, the prices of these products have increased by 39.7% worldwide since last year.
This is such a significant growth that no such price increase has been recorded since October 2010.
In particular, prices for vegetable oils, cereals and sugar have risen sharply.
As the Hungarian news portal Forbes reports, the main reason for the significant increase in prices is the coronavirus epidemic, which has also caused disruptions in production, the labour market and transportation. In addition, experts also added that the extraordinary price increase could obstruct the rapid economic recovery expected in the post-Covid period, and at the same time, inflation could accelerate.
Another critical factor is that by the alleviation of the pandemic, demand for certain products has increased; however, producers are unable to keep up with the rapid growth in demand. Such a problem could be experienced this week as well, when one of the largest slaughterhouse chains in the U.S. meat industry, struggling with growing demand and labour shortages, was even paralysed for days by Russian hackers.
The increase in food prices was also significant in Hungary: in April this year, food products cost by an average of 5.1% more than a year earlier.
In Hungary, the most significant price increase could be experienced in the case of cooking oil (22.8%), buffet products (7.8%), rice (7.7%), margarine and flour (7.5 and 7.4%), dry pasta (6.8%), sugar, fruit and vegetable juices (4.9%).
Additionally, as we previously reported, the price of Hungarian poultry is also expected to rise by 10-12% in the upcoming months, mainly due to the 30% cost increase in the livestock and animal products market.