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Worrying spike in Global Food Prices -CP Chandrasekhar and Jayati Ghosh

-The Hindu Business Line

Having recovered from their lows touched early or mid-2020, food prices are rising fast. At $574.8 a metric tonne in February 2021, the price of soyabean was 53 per cent higher than the corresponding month of 2020, when the effects of the Covid pandemic were yet to be felt (Chart 1).  Over that period, the price of maize had risen from $168.71 to $245.24 a metric tonne or by 45.4 per cent; of rice from $426.45 to $531 a metric tonne or by 24.5 per cent; and that of wheat from $238.98 to $$276.63 a metric tonne or by 15.8 per cent. The spike is not restricted to grain and soyabean but affected edible oils as well (Chart 2). The price of coconut oil had risen from $844.12 to $1438 a metric tonne over the year ended February 2021 or by 70.4 per cent. There is some unevenness, however. The increase in the case of sunflower oil over that period was only 8.1 per cent. But, overall, the Food and Agricultural Organisation’s (FAO’s) price index for cereals had risen by 26.5 per cent and that for vegetable oils by 51 per cent between February 2020 and February 2021. The cereals price index (that relates current prices to an average of 2014-16 prices set to 100) stood at 125.7 in February 2021, a level last exceeded in July 2013. In the case of edible oils, the index at 147.4 in February 2021 was at its highest since February 2012 (Chart 3).

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