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Domestic food price inflation remains high in low- and middle-income countries. Inflation higher than 5% is experienced in in 59.1% of low-income countries (2.0 percentage points higher since the last update on April 25, 2024), 63% of lower-middle-income countries (0.8 percentage points lower), 31% of upper-middle-income countries (2.0 percentage points lower), and 14.5% of high-income countries (1.8 percentage points higher). In real terms, food price inflation exceeded overall inflation in 53% of the 166 countries where data is available.
Since the last update on April 25, 2024, the agriculture and cereal price indices closed 1%and 6% higher respectively, while the export price index closed 4% lower. Among cereals, maize and wheat prices closed 4% and 21% higher, respectively, while rice prices closed 1% lower. On a year-on-year basis, maize prices are 21 percent lower, wheat prices are 7 percent higher and rice prices on the other hand are 20 percent higher. Compared to January 2020, maize prices are 19 percent higher, wheat prices are 24 percent higher, and rice prices are 46 percent higher. (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)
The World Bank's latest Commodity Markets Outlook, published late April 2024, sheds light on significant developments and future projections in global food commodity markets. In early April, the food price index moderated after a 4% decline in the first quarter of 2024, to a level 9% lower than a year earlier. Grains, oils, meals, and other food sub-components exhibited declines ranging from 2% to 5%. Maize prices fell by approximately 11%, and wheat prices decreased 4%, reaching three-year lows. These reductions were attributed to competitive pricing from the Black Sea region, increases in production by major exporters, and optimistic outlooks for the upcoming harvest, with global maize production expected to reach record highs. Rice prices rose by around 4% over the same period, standing 28% higher year-on-year because of supply concerns in major exporting nations.
Recipe for a Livable Planet: Achieving Net Zero Emissions in the Agrifood System, a recently published report from the World Bank, outlines a strategic framework to address agrifood-related emissions while ensuring food security for a growing global population. According to the report, the global agrifood system contributes almost one-third of all greenhouse gas emissions worldwide. In addition, the report highlights that the benefits of investing in agrifood emission reduction are not only environmental, but also economic. It is estimated that annual investments must increase by 18 times to US$260 billion a year to halve current agrifood emissions by 2030 and put the world on track for net-zero emissions by 2050, but the health, economic, and environmental benefits could be as much as US$4.3 trillion in 2030, representing a 16-to-1 return on investment costs. The report identifies distinct opportunities for action at the national and global levels.
The 2024 Global Food Policy Report, released this week by the International Food Policy Research Institute (IFPRI), highlights the importance of sustainable healthy diets and delivers evidence-based recommendations on ways to make the foods that form these diets more desirable, affordable, accessible, and available while considering environmental impacts. According to the report, progress in reducing undernutrition and micronutrient deficiencies has slowed in low- and middle-income countries, while overweight and obesity has rapidly increased worldwide. The report draws on a comprehensive food systems framework to recommend transformative actions which includes tackling demand-side challenges, such as affordability and consumer preferences, together with improving food environments and addressing supply-side issues to enhance the availability of nutritious foods.
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 May 28, 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.
World Farming Agriculture and Commodity news - Short update - 1st week of June 2024
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.
South Africa’s agricultural GDP rebounded by 13.5% quarter-on-quarter (q/q) in the first quarter of 2024 (Q1-2024), following a decline of -2.4% q/q in Q4-2023. In Q1-2024, the agricultural sector was primarily supported by higher production volumes in horticulture and livestock, and better terms of trade in horticulture as well as in field crops. In Q1-2024, South Africa’s agricultural sector recorded a positive trade balance with a trade surplus of US$1.4 billion, this was an increase of 20% year-on-year (y/y). The trade surplus was a result of a decline in agricultural imports coupled with higher exported volumes and prices of agricultural commodities. The Crop Estimates Committee (CEC) revised its summer crop production estimates for the current 2024/25 marketing year (MY). From the previous forecast, total maize production was revised downwards by 0.6% to 13.31 million tons, representing a decline of 19% y/y. Soya bean was estimated at 1.78 million tons, down by 1.9% from the previous forecast, while sunflower seed production was ramped up by 5.6% to 649 250 tons. The groundnut forecast was trimmed by 0.95% to 54 440 tons, and dry beans were also revised downwards by 3.6% to 52 190 tons. Sorghum was increased by 1.8% to 95 830 tons from the previous estimate
Commodity Prices 8/6/2024
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