Global food prices in September were nearly 33% higher than a year earlier. According to the monthly food price index of the UN Food and Agriculture Organization (FAO), this is the highest level since 2011. Since July, food prices have risen by more than 3%.
The food price index is an average of a range of food raw materials, including vegetable oils, grains, meat, and sugar. The index converts actual prices into a relative average price level, with the comparison being prices between 2002 and 2004.
Based on real prices, it is currently more difficult to buy food on the international market than in almost any other year since UN records began in 1961. The only exceptions are 1974 and 1975. Those spikes in food prices occurred following the oil price peak in 1973.
This year's increases are mainly due to higher raw material prices, labor shortages caused by the coronavirus pandemic, and sharply increased transportation costs. Labor shortages have reduced the availability of workers to grow, harvest, process, and distribute food,
No single raw material has been consistently responsible for the average real price increase since 2000. However, the price index for edible oil crops has risen significantly this year. The price of vegetable oils increased by 16.9% between 2019 and 2020.
Another food category that contributes most to the rise in food prices is sugar. Here, too, unfavorable weather conditions, including frost damage in Brazil, have reduced supply and pushed prices upward.
Grains have contributed less to overall price increases, but their global accessibility is especially important for food security. Wheat, barley, corn, sorghum, and rice make up at least 50% of global nutrition, and even 80% in the poorest countries. Global buffer stocks of these crops have been shrinking since 2017.