World Bank Report: Global Food Prices Remain High – Key Insights and Solutions.
The most recent Food Security Update report by the World Bank, unveiled on Tuesday, underscores the persistent high inflation in food prices globally, spanning low, middle, and high-income nations, as per available data.
The report reveals that in 63.2% of low-income countries, inflation exceeded 5%, marking a 1.3 percentage point increase from the previous update in January 17, 2023. Moreover, 73.9% of lower-middle-income nations and 48% of upper-middle-income countries experienced inflation levels surpassing 5%, showing no change from the prior update.
In high-income countries, the bank observed that food inflation surpassed 5% in 44.4% of nations, indicating a decrease of 1.9 percentage points from the preceding food update.
Additionally, the report underscores that in 71% of the 165 countries with available data, food price inflation outpaced overall inflation in real terms.
Further Insights: Recent attacks by Houthi rebels on vessels in the Red Sea, reported by the International Food Policy Research Institute (IFPRI), have resulted in a 40% reduction in trade volumes through the Suez Canal, thereby impacting global food security, notes the World Bank’s Food Security Update. In 2023, food prices, particularly in the agricultural price index, witnessed a 9% decline owing to ample supplies of major crops, barring rice, which saw a 27% decrease.
Forecasts indicate forthcoming price declines in 2024 and 2025; however, risks such as energy cost escalations, adverse weather conditions, trade constraints, and geopolitical uncertainties could intervene.
Responding to the global food security crisis, the World Bank Group has intensified its efforts by earmarking $45 billion, inclusive of $22 billion in new lending and $23 billion from existing portfolios.
These initiatives now extend to 90 countries, addressing both short-term necessities like expanding social protection and long-term objectives such as enhancing productivity and implementing climate-smart agriculture.
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The World Bank further projects that its intervention will positively impact 335 million individuals, equating to 44% of the undernourished population. Approximately 53% of the beneficiaries are women, who are disproportionately affected by the crisis.
One of the World Bank’s initiatives, the West Africa Food Systems Resilience Programme, has a budget of $766 million, aiming to enhance preparedness against food insecurity while bolstering the resilience of food systems in the region.
Additionally, the bank is gearing up to allocate an additional commitment of $345 million for Senegal, Sierra Leone, and Togo.
