In the turbulence following the COVID-19 pandemic, one issue has consistently been a global concern: food security. Since the pandemic's onset in 2020, food prices have experienced dramatic shifts, influenced by a number of factors. The World Bank’s Food Security Update, drawing from national and public sources across 160 countries, has attempted to track these fluctuations, and provide information to policymakers, economists, and stakeholders. This guidance has helped shape decisions aimed at promoting economic stability, food security, and social welfare.
Now that over 100 editions of the Update have been published, what lessons have we learned thus far, and what lies ahead in our continued effort to track and respond to the impacts of food price shocks?
Global food prices spiked following COVID-19 but have fallen since their top in 2022
Initially in 2020, supply chain disruptions and pandemic-induced bottlenecks accelerated a surge in global prices. This situation was exacerbated by Russia’s invasion of Ukraine, which led to export bans from key agricultural exporters. The first half of 2022 saw record highs, particularly in cereals and oils, as global demand surpassed supply. However, a turning point occurred in mid-2022 when demand tapered off due to rising global interest rates and eased supply constraints following the resumption of exports from Ukrainian ports. Although prices began to stabilize by mid-2023, they remained notably higher than pre-pandemic levels. Since then, global food prices have seen a gradual decline, with projections indicating further decreases throughout 2024 and 2025. As of April 2024, prices were 9 percent lower than the previous year (See figure 1).
Food prices remain high globally
The fluctuation of international food prices, driven by factors like supply chain disruptions and geopolitical tensions, has had significant repercussions on domestic markets. Currency depreciation, alongside escalating import costs, spurred inflationary pressures in numerous economies, particularly those heavily reliant on imports. Additionally, the asymmetric transmission of international prices and local events, such as adverse weather conditions, further complicated the domestic price landscape. Fertilizer prices emerged as a major inflation driver, soaring since late 2020 due to a confluence of factors including increased energy prices and supply chain bottlenecks, which were further exacerbated by the war in Ukraine. Despite some retreat post-mid-2022, fertilizer prices remained high, sustaining inflationary pressures. Concurrently, a wage-inflation, particularly pronounced in developed nations, has exerted significant upward pressure on domestic food prices. As wages rise to keep up with inflation, the increased labor costs contribute to higher food prices, creating a cyclical effect.
Despite a decrease in domestic food price inflation from its peak in 2022 (see figure 2) current price levels still remain elevated compared to pre-pandemic levels across various regions (see figure 3). In the past year, spanning from January to December 2023, most regions have sustained high levels of average domestic food price inflation, with a majority of countries experiencing double-digit increases, except for East Asia and the Pacific, and South Asia.
Tracking price impacts on vulnerable households is becoming more challenging
Tracking inflation globally has presented numerous challenges, especially in conflict-affected countries where food insecurity is prevalent and data availability is poor.
The Consumer Price Index (CPI) is traditionally used globally to monitor changes in the cost of living by assessing the prices of goods and services households commonly purchase. However, CPI, and its food-specific version, has notable limitations. It often targets major urban centers while overlooking how conflict and displacement uniquely affect local food prices. Further, the index also fails to reflect the diverse coping strategies households employ amid rising food costs, and neglects changes in the availability and quality of essential items like staple foods during crises.
New AI tools are helping provide more granular data in real-time
Recognizing this, the World Bank has pioneered new machine learning techniques to enhance the accuracy and timeliness of data. These innovations allow for combining high-frequency surveys with predictive analytics to create the Real Time Prices dataset. This dataset provides real-time, market-level inflation rates and is currently available for 36 countries.
RTP has transformed how we monitor food security impacts of price disruptions, offering decision-makers timely and alternative insights, sourced from entities including the World Food Program, UN-Food and Agricultural Organization, and select national statistical offices. A key application is in Yemen, where RTP data supports a bi-monthly Joint Monitoring Report by organizations like ACAPS, FAO, the UN Children's Fund, the World Bank, WFP, and the World Health Organization. This report tracks food security risks linked to local fuel, exchange rates, and food price shocks throughout the year.
Looking ahead, RTP data will be maintained under the World Bank’s Food Systems 2030 Multi-Donor Trust Fund. You can Download RTP data and use it in your projects, access it from the Global Alliance for Food Security’s Global Food and Nutrition Security Dashboard along other useful resources, or browse current results below:
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