Food Inflation Spirals Around The World

Food inflation has soared across much of the developing world since Russia's invasion of Ukraine and has trapped several richer countries in a cycle of rising prices, a report by the World bank has found.

The Washington based World Bank Group said the war in eastern Europe would hit many countries with an increase in food bills worth more than one percent of their annual national income (GDP), while others would fail to contain the impact and the plunged into a full blown debt crisis.

Lebanon was the worst hit, the World bank said, after a food grain store explosion in Beirut 2 years ago crippled the country's ability to hold and distribute maize and wheat to it's 6.8 million people.

Food inflation there hit 332% in the year to June 2022 ahead of Zimbabwe's 255% increase and Venezuela's 155%. Turkey was 4th with the food inflation rate of 94%.

Recent deal between Ukraine and Russia, brokered by Turkey and the United Nations, to allow container ships carrying cereals to leave Ukrainian ports helped bring commodity prices down.

World Bank figures showed a dramatic reversal of cereal prices on global markets since June 2022 and a steep fall in the price of other agricultural products to lows close to those seen last year. Rice has increased in cost over recent months, but from a low level during the pandemic that bucked the trend of historically high price levels for wheat, barley, and maize.

In the first week of August this year, Bangladesh called on the International Monetary Fund (IMF) for financial support after an increase in the cost of imported food and energy threatened to undermine the South Asian countries finances. Dhaka is understood to need about U.S.$ 4.5 billion though only U.S. $1 billion to U.S. $1.5 billion US dollars is available under current IMF arrangements.

Sri Lanka has already asked for a bail out from the Washington based fund after running out of cash to buy vital impose while a deal with Pakistan for a U.S.$6 billion IMF loan was revived in June this year.