On September 23rd the UN hosts a “people’s summit” on global food systems. The fully virtual event will seek to tackle a very concrete problem: how to make the food supply chain fairer, greener and healthier. The delegates have their work cut out, because for months that chain has been under stress. An index compiled by the Food and Agriculture Organisation, a UN agency, shows that food prices were a third higher in August than a year before. They have risen in 13 of the past 15 months, and are close to their peak of 2011. Poor countries are especially vulnerable to pricier food imports (see chart below).
At first glance the main factors behind this rise suggest it is transitory. One is the fallout from a severe episode of swine flu in China in 2018 that wiped out half of the country’s 440m-strong pig herd, the largest in the world. Since then China has been rebuilding its stocks at a frantic pace, importing vast quantities of grain to feed its new pigs, and in doing so draining global supplies of corn and soyabeans.
Another problem has stemmed from a stark rebound in global trade at a time when covid-19 is still causing disruptions at key bottlenecks in the supply chain. Containers are in short supply and many planes remain grounded, which restricts the movement of fresh food. The price of ferrying staples like wheat or sugar on bulk ships, meanwhile, has more than trebled in a year.
The final factor is weather. Droughts in parts of Africa, Asia and the Americas, caused by a climatic phenomenon called La Niña, caused harvest forecasts to disappoint at the turn of year, fuelling inflation. But more clement conditions since the spring means the growing season has progressed unperturbed in many key regions.
Yet there are reasons to think relief is premature. Reports that swine flu is spreading across China again are feeding fears of another cull. Rebuilding the country’s pig stocks anew would require tonnes of feed to fatten lots more little pigs, which could once again upset grain markets. The huge backlog in shipping means hiccups will dissipate only slowly. As covid-19 cases rise, fuelled by the highly infectious Delta variant, more restrictions could come into force, delaying shipments further still. And meteorologists reckon there is a 70-80% probability that another La Niña strikes this winter.
The most enduring headache, however, may be global warming. Already a rise in average temperatures is changing production patterns in some of the world’s breadbaskets, and not always in a good way. More frequent extreme events in big farming regions, meanwhile, risk denting production unexpectedly. And the urge to shorten supply chains could make markets less efficient, which would add to costs. Food prices are likely to remain a hot topic well after covid-19 is under control. ■
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