Food price inflation remains elevated in countries around the world, the Philippines included, where food alone accounts for more than half the consumer price index (CPI) regularly monitored by the Philippine Statistics Authority (PSA).
Data indicate food inflation averaged above 5 percent in so-called low-income countries, 86 percent in lower-middle-income countries and 87 percent in upper-middle-income countries, with many jurisdictions posting double-digit CPIs, data gathered by the World Bank show.
Food inflation in the country averaged 4.79 percent from 1995 until this year and stood as high as 17.3 percent in July 2008 and low of minus 0.90 percent as recently as September 2019.
These numbers tend to hide the fairly extreme impact of food inflation on the lives of Filipinos as this climbed to 12.7 percent in January this year after having stood at 11.8 percent in November and December last year.
Headline inflation proved highest in January this year at 8.7 percent but moderated to 8.6 percent in February. This steadily rose through 2022 when it averaged only 3 percent in January but would end at 8.1 percent by December.
That monetary and fiscal officials attribute food inflation to events outside their joint policy response to contain it, such as Russia’s aggression in Ukraine, global supply chain disruptions and extreme weather events, these still do not blunt their impact on already struggling Filipinos who find food prices increasingly unaffordable and inaccessible.
According to the World Bank, the countries that suffer the most from elevated food price inflation are in Africa, North and Latin America, Europe, and Central and South Asia.
The rice staple that most Filipinos cannot go without posted prices 19 percent higher on annual basis as of January this year, it said.
In the Agricultural Market Information System (AMIS) Market Monitor report released in March this year, the World Bank highlighted the uncertainty hanging over agricultural markets as the Ukraine war rages.
“Global food prices, despite having fallen from historic peaks, remain high and that new export restrictions could send prices soaring again. One year after Russia’s invasion of Ukraine, many of those export-limiting measures have lapsed, and high prices mostly reflect broad global inflation, but the number of restrictions remaining in place is still troubling; 101 export restrictions—including quotas, licenses, and outright bans—are still being enforced, contrary to World Trade Organization principles that the limits should be temporary.
“It has been estimated that those restrictions covered more than 11 percent of global food trade in 2022, with export bans alone responsible for 3.8 percent. Although countries with a small share of food exports account for most of the remaining restrictions, even those are causing price distortions and should be lifted.
“One year after Russia’s invasion of Ukraine, the International Food Policy Research Institute (IFPRI) reviewed experiences of the past year and remaining uncertainties about food security in the future. The war in Ukraine jeopardized more than one-third of world wheat trade, 17 percent of world maize trade, and almost 75 percent of world sunflower trade, causing prices of wheat futures to jump almost 60 percent within a week of the war’s outbreak; corn and soybean prices were up more than 15 percent.
“Although the world faced the possibility of another food price crisis, the worst-case scenarios for agricultural trade and food security were largely averted, with prices falling back to pre-war levels by August 2022 because of efforts such as the partial re-opening of ports through the Black Sea Grain Initiative and an increase in global humanitarian efforts to mitigate the impacts of the war.
“As Russia’s invasion of Ukraine continues, uncertainty remains in agricultural markets. With ending stocks for 2022/23 the lowest since 2007/08 for wheat and 2012/13 for maize and soybeans, global supplies are tight, which will increase price volatility during periods of uncertainty, such as growing seasons in the northern hemisphere. Such instability may lead to future market disruptions, which requires close monitoring for the upcoming year,” the World Bank said.
