Global food prices rise as countries stockpile amid worsening pandemic
Global food prices rise as countries stockpile amid worsening pandemic
A number of countries, including China, are stockpiling for an uncertain pandemic season amid concerns over whether the global supply chain for food can remain intact as COVID-19 cases rise worldwide.
World food prices have been rising for four straight months, according to a United Nations price index. Countries importing grains to boost their pandemic stockpiles include Egypt, Jordan, Taiwan and others.
“China comes to mind, as they’ve taken on a massive restocking program,” said Michael Magdovitz, food and agriculture analyst at Rabobank. “But also India. Countries may increase their buffers to avoid any supply-side issues,” such as lockdowns or border closures should the pandemic worsen.
In times of uncertainty, people are more likely to hoard, according to Stephanie Preston, professor of psychology at the University of Michigan.
“I think people are trying to protect their own interests, which in some ways is rational,” Preston said. “Even if it can cause what they call a ‘commons problem,’ where then there’s not enough for everybody.”
When the pandemic first hit, governments and food security authorities expressed concerns about food protectionism. That didn’t come to pass globally.
Still, bottlenecks have turned up in developing countries. In South Africa, workers were banned from traveling to a packing plant for citrus, said Thomas Reardon, agricultural economist at Michigan State University.
“Also, because wood was not classed as an essential item, the wood was not coming in to make packing crates, so the fruit could not be packed,” Reardon said.
Globally, the prices of grain and meat continue to rise, just as more and more people can’t afford them given widespread job losses. Sherman Robinson, trade scholar at the Peterson Institute for International Economics, said food insecurity is showing up everywhere.
“It’s widespread across developing countries,” Robinson said. “In the developed countries, it really depends on how good your social safety net is. So in the U.S. case, we’re probably among the worst of the developed countries.”
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