Russia’s invasion of Ukraine in late February dramatically worsened the outlook for already inflated global food prices.
The halt in Ukrainian exports following the outbreak of the conflict pushed the Food and Agriculture Organization’s (FAO) food price index, which tracks international prices of the most globally traded food commodities, to its highest point in March since records began in 1990.
Russia’s invasion of Ukraine, a move Russia calls a “special operation” to demilitarise its neighbour, is the latest development in a growing global food crisis.
While post-pandemic global demand, extreme weather, tightening food stocks, high energy prices, supply chain bottlenecks and export restrictions and taxes have been straining the food market for two years, the recent convergence of all these factors following Russia’s invasion is unprecedented and has sent food inflation rates spiking around the world.
In Europe, the Consumer Price Index for food has sharply risen in all of the continent’s largest economies, while in the United States the CPI climbed more than 14 percentage points since January 2020.
In developing and emerging market countries, the index change is even more dramatic, leaving consumers facing much higher prices for essential food staples.
The most extreme examples have seen food inflation rise hundreds of points. Lebanon, a country that is heavily reliant on food imports including most of its wheat from Ukraine, saw the price index rise more than 3,000 percentage points since 2020.
Note: Countries’ baseline consumer price indices to different years. Indices based on food for India and the U.S., food and non-alcoholic beverages for the other countries.
In many developing nations, food is the single largest category in the overall Consumer Price Index — the selection of goods economists use to calculate people’s overall cost of living. It accounts for about 40% on average, while it rises to half the total cost of living for consumers in India and Pakistan, International Monetary Fund data shows.
Rising prices for basic food items have already fueled protests in countries around the world, including Argentina, Indonesia and Greece. In Iran, protestors took to the streets after prices for flour-based staples rose as much as 300%.