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Global Food Prices Surge as Inflation Spreads

From Peru to the Philippines, bad harvests and supply bottlenecks are leaving poor families hungry

By Samantha Pearson and Luciana Magalhaes | 5 November 2021

WALL STREET JOURNAL — (SÃO PAULO) Earlier this year, Celia Matos, a single mother from São Paulo’s Paraisópolis favela, could afford to buy the basics to feed her family. Now, she says, with the price of meat and other foods up by 30%, she often goes to bed hungry so there will be enough rice and beans for her four children. …

Rising food prices are causing increasing hardship across a swath of the developing world, from Peru to the Philippines. In October, the United Nations Food and Agriculture Organization says, world food prices hit their highest level since 2011. …

The rise has been particularly sharp in Latin America, where widespread inflation has pushed up the prices of most goods and the U.N. estimates that tens of millions of people are malnourished or skipping meals.

In Asia, where countries have generally experienced less inflation, bad weather has hit crops, leading to price increases in some places. Heavy rains in India in recent months have caused flooding and landslides, destroying crops and sending up the price of vegetables such as cauliflowers and onions. …

In China, heavy rains have also hit top vegetable-growing provinces, deepening supply shortages that have arisen as the nation recovers from the effects of the pandemic. The Philippines and some other Southeast Asian countries have also struggled with higher prices for vegetables and palm oil.

In Latin America, the damage from rising food prices may be deeper and more long-lasting, economists and policy makers have warned.

The region’s central banks have aggressively raised interest rates in an effort to curb inflation. Brazil and Chile both recently announced their biggest interest rate increases in two decades.

That is tough medicine to swallow in a region that suffered the world’s deepest economic contraction from the pandemic as well as its highest per capita death rate from Covid-19, according to figures from Our World in Data. …

After recording paltry growth in the several years before the pandemic, Brazil and other parts of the region now face stagflation, a toxic combination of no growth and higher prices, he said.

Inflation is running above central banks’ targets across the region—in Brazil’s case, three times above the target. The country’s worst drought in almost a century has also hit crops and dried up the reservoirs that power hydroelectric dams, adding pressure to electricity prices.

Rising food and energy prices have also driven inflation higher in Mexico, Colombia, Peru and Chile. In Brazil, beef and eggs are more than 20% more expensive than last year, while the cost of chicken and tomatoes has risen almost 30%, according to a study by Getulio Vargas Foundation, or FGV. […]

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