### Summary
Food prices are increasing globally due to drought conditions, disrupted grain deliveries, and government policies to protect their own supplies. The rising prices are driven by concerns over the enduring effects of a warming climate on production and the possibility of high food prices becoming embedded in the economy. Supermarket profits have increased, but this does not help mitigate the rising costs for consumers.
### Facts
- Wheat prices spiked and then retraced due to Russian missile strikes on Ukrainian ports and disrupted grain exports.
- Erratic weather is depleting rice harvests in India, leading to a ban on rice exports and increasing the risk of higher global prices.
- Food prices in Australia have remained steep, with dairy and breads/cereals leading the price increases.
- Food prices have risen steeply in the UK and France, while prices in the US have increased at a slower pace.
- High global food prices pose a risk of creating an inflationary spiral and are beyond the influence of central banks.
- Australian supermarkets have increased profit margins during the inflationary period, but deny profiteering.
- While the extent of price rises may not be as bad as last year, there will still be an impact on near-term inflation and consumer purchasing power.
🌾 Wheat prices spiked due to Russian missile strikes on Ukrainian ports and disrupted grain exports
🌦️ Erratic weather is depleting rice harvests in India, leading to a ban on rice exports and increasing the risk of higher global prices
🥛 Food prices in Australia remain steep, with dairy leading the price increases
🌍 Food prices have risen steeply in the UK and France, while prices in the US have increased at a slower pace
💰 High global food prices pose a risk of creating an inflationary spiral and are beyond the influence of central banks
🛒 Australian supermarkets have increased profit margins during the inflationary period but deny profiteering
💸 While the extent of price rises may not be as bad as last year, there will still be an impact on near-term inflation and consumer purchasing power.
### Summary
India has witnessed a surge in inflation, reaching a 15-month high, primarily due to soaring prices in essential commodities. The government is implementing measures such as reducing retail prices, imposing export bans, and releasing wheat into the market to stabilize prices.
### Facts
- 🔺 Inflation in India has reached a 15-month high, driven by soaring prices in essential commodities such as vegetables, pulses, spices, and cereals.
- 🌍 Global uncertainties, including geopolitical tensions and crude oil price fluctuations, add to fears of food inflation picking up in India.
- 💰 The Reserve Bank of India (RBI) aims to maintain a tight grip on inflation and anchor it close to the 4 percent mid-point of the desired range.
- 💡 To mitigate the impact of rising prices, the Indian government has taken various steps, including reducing retail prices for specific stocks of tomatoes, imposing export bans on rice, and releasing wheat into the open market.
- 🇮🇳 Prime Minister Narendra Modi acknowledges the challenge of high inflation and vows to take more steps to minimize the burden of rising prices on citizens.
- 🌾 The government announces a 40 percent export duty on onions until the end of 2023 to control rising prices driven by supply-side challenges.
- 💸 The government is considering reallocating funds from various ministry budgets to address surging costs without jeopardizing the federal deficit target.
- 🛢️ Possible measures may include reducing taxes on domestic petrol sales and relaxing import tariffs on cooking oil and wheat.
- 📉 The central bank keeps borrowing costs unchanged, maintaining one of the highest rates in Asia, to address concerns about escalating prices.
- 🍚 India has also imposed a ban on non-basmati rice exports and implemented a 40 percent export duty on onions to maintain domestic supply and stabilize prices.
### Prime Minister Modi's Commitment
Prime Minister Modi emphasizes the need to take measures to ease the burden of rising prices on Indian citizens and pledges to continue efforts in this regard.
### The Indian Government's Multi-faceted Approach
India is adopting a multi-pronged approach to address inflation, with measures implemented by both the RBI and the government. These efforts demonstrate the nation's commitment to maintaining economic stability and minimizing the impact of inflation on the populace.
### Summary
India has imposed a 40% custom duty on onion exports as rising prices have led to concerns about further inflation, with data showing a significant increase in the prices of tomatoes, onions, and potatoes since May.
### Facts
- 🧅 India has announced a 40% custom duty on onion exports to combat rising prices and fears of increased inflation.
- 📉 Vegetable prices, including tomatoes, onions, and potatoes, increased by 87.1% month-on-month in July, compared to 16% in June.
- 💰 The price of onions rose from Rs 22.6 per kg to Rs 28.1 per kg between May and August, representing a 24% increase.
- 📊 Wholesale inflation in food articles reached 14.25% in July, while retail food inflation rose to 10.6% in the same month.
- 🚫 In July, the government had already banned the export of non-basmati white rice, sugar, and wheat to control inflation.
### Summary
July's food price data in Canada shows a slight decrease in overall food price inflation, indicating a potential decrease in prices for some essential unprocessed food items. Factors such as weather conditions, consumer preferences, disruptions in livestock production, and global trade dynamics influence food prices.
### Facts
- 📈 Food prices in Canada increased at a slower rate in July, going from 8.3 percent to 7.8 percent.
- 🌧️ Weather conditions like droughts and excessive rain impacted the prices of certain food items.
- 🥩 Meat prices increased by 1.3 percent, possibly influenced by factors like beef prices, shifts in consumer preferences, disruptions in livestock production, and international trade dynamics.
- 🥦 Veggie prices also went up by 1.2 percent, indicating supply uncertainties and weather-related disruptions impacting harvests.
- 🥐 Bakery products and dairy products saw slight increases of 0.8 percent and 0.6 percent respectively, reflecting complex production and transportation processes.
- 🐟 Fish prices declined by 1 percent, potentially due to evolving consumer behaviors or shifts in imports availability.
- 🍎 Fruit prices decreased by 3.4 percent, highlighting vulnerabilities in the transportation and global demand for fruits.
- 🌍 Comparatively, Canada has the second lowest food inflation rate within the G7 countries, with the United States having the lowest.
- 🗺️ Food inflation rates in Quebec (9.4 percent) and Ontario (7.2 percent) demonstrate varying regional dynamics, affected by factors like weather and supply and demand balance.
- ♻️ The impact of clean fuel and carbon taxes on food prices remains uncertain.
- 🛒 Consumer preference for store brands and discount stores is growing, likely due to rising shelter expenses and a cost-conscious consumer market.
- 🇨🇦 Canada's food system has shown resilience, but there is a need for collaboration to ensure everyone has access to affordable food.
### Summary
The price of rice is rising globally due to higher fertilizer prices, drought in the Horn of Africa, and India's ban on rice exports, which is causing a shortage of 9.5 million metric tons of rice.
### Facts
- 🍚 Rice prices in Kenya have increased by a fifth since June due to higher fertilizer prices and drought in the Horn of Africa.
- 🍚 India's ban on rice exports is an attempt to control domestic prices ahead of a key election year, leaving a gap of around 9.5 million metric tons of rice globally.
- 🍚 Rice prices in Vietnam have reached a 15-year high, and this increase is putting vulnerable people in poor nations at risk.
- 🍚 The El Nino weather phenomenon and the halt of wheat exports from Russia to Ukraine have already threatened global food security.
- 🍚 Other countries may follow India's ban on rice exports, which could worsen the shortage. The United Arab Emirates has already suspended rice exports.
- 🍚 Extreme weather, including the El Nino, could damage rice crops in other countries, further exacerbating the shortage.
- 🍚 Rice consumption in Africa has been growing steadily, and most countries heavily rely on imports. Senegal, for example, is substituting expensive imported rice with locally grown rice.
- 🍚 Asian countries, where 90% of the world's rice is grown and consumed, are struggling with production. The Philippines, the second-largest rice importer after China, experienced rice crop damage due to Typhoon Doksuri.
- 🍚 The restriction on rice exports will make India an unreliable exporter, causing concerns in the export market. Vietnam is hoping to capitalize on the situation by increasing rice exports and targeting new markets.
- 🍚 Thai rice exporters are reluctant to take orders due to uncertainty about India's next moves and concerns about the El Nino, which causes price fluctuations.
### Summary
Key diplomatic partners of India, including Singapore, Indonesia, and the Philippines, are urging India to resume rice exports to their countries after India suspended non-basmati shipments to control prices.
### Facts
- 🍚 Singapore has requested around 110,000 tonnes of rice from India. Indonesia planned to import 1 million tonnes of rice to protect against disruptions caused by the El Nino weather pattern, and the Philippines relies on India for rice supplies.
- 🌍 The UN World Food Programme has sought 200,000 tonnes of Indian rice for its humanitarian operations due to global food insecurity triggered by the Covid-19 pandemic and the Ukraine war. Bangladesh is also in talks with India for agricultural commodity supplies.
- 📉 India has taken measures, including export curbs, to control escalating food prices as retail inflation reached a 15-month high. Prime Minister Narendra Modi pledged to bring down inflation.
- 🛢️ The ban on non-basmati white rice exports has affected global rice prices. Neighboring countries like Bangladesh and Nepal heavily depend on Indian rice, while certain African countries purchase broken rice.
- 📈 Food and beverages inflation, which accounts for nearly 46% of the overall consumer price basket, rose to 10.57% in July. Economists predict that food prices will remain high for the next few weeks before cooling off in September.
Rice prices in Asia have surged to their highest level in almost 12 years due to India's rice export ban and adverse weather conditions, leading to concerns about food price volatility and potential shortages of other food commodities in the region. Factors such as extreme climate events, the onset of El Niño, trade restrictions, and protectionist food policies are contributing to the situation. While most Asian countries can withstand a supply shock in rice, there are concerns about the impact on overall farm output and consumer price inflation, particularly for vulnerable populations.
The USDA report release on August 11th caused significant changes in commodity markets, with soybean and cotton prices increasing while corn prices had a more mixed reaction.
Both rice and wheat supplies are facing alarming shortages, raising concerns about a potential world food crisis, and the Indian rice export ban, along with other factors, has implications for global rice markets and prices.
Grain prices continued to decline amid frustrations in the grain markets, with corn and soybean contracts moving lower while wheat prices rose; the heatwave's impact on crops may affect future progress.
India is expected to halt sugar exports for the first time in seven years due to low rainfall and reduced cane yields, which could increase global prices and fuel inflation on global food markets.
The grain markets are influenced by multiple factors such as yields, the U.S. economy, seasonals, early harvest yields, geo-politics, the September WASDE report, and more, which can have a significant impact on prices until the end of 2023.
India is facing a rise in food prices due to uneven and scanty rain, prompting the government to take measures to boost supplies and ease inflationary pressures.
Wheat prices decrease due to increased production estimates out of Russia and hot dry conditions, while corn and soybeans increase with support from weather forecasts projecting hot dry conditions.
Consumers in Pakistan experienced a sharp increase in sugar and flour prices, causing further financial strain, as wholesalers raised the prices due to illegal channels of sugar export and hoarding, leading to fears of additional price pressures, while flour millers fluctuated prices based on the open market wheat rate.
The Indian government's efforts to control food prices, such as imposing taxes and export bans, may help contain inflation domestically but could lead to higher prices globally, particularly for rice, affecting countries that rely on food imports.
Prices in British shops have risen at their slowest rate since October, with a 6.9% increase in the year to August, due to rising costs of meat, potatoes, and cooking oil, as well as a reduction in grain exports from Ukraine and export restrictions on rice from India, according to the British Retail Consortium.
India's ban on exporting non-basmati white rice due to rising prices has sparked fears of global food inflation and led rice-dependent countries to seek exemptions, potentially impacting the livelihoods of farmers and causing market reverberations.
Erratic climate conditions in India, including a dry August, have led to a significant increase in food prices, with onions alone becoming 25% more expensive since June, causing concern about global food inflation as India is a major exporter of rice, sugar, and onions and is a key supplier to many Asian and African countries.
Global prices for staple foodstuffs have reached a two-year low in August, driven by declines in dairy products, vegetable oils, meat, and cereals, while sugar and rice prices have increased due to export restrictions and extreme weather conditions.
The global food commodity prices declined by 2.1 percent in August, driven by falling prices of essential food items, excluding rice and sugar, according to the latest report from the FAO.
Despite a price cap on rice, rising food price inflation is expected in the Philippines due to a weakening exchange rate with the US dollar and a lack of domestic food production.
Soybean prices are slightly higher at midday, with soybean meal and soybean oil futures also making gains, while Canadian Canola prices are down; the weekly Crop Progress report shows progress in soybean harvest and a drop in soybean conditions, and Brazil's soybean planting lags behind last season's pace.
Surging prices for soft commodities, such as orange juice, live cattle, raw sugar, and cocoa, driven by weather-related damage and rising climate risks, are contributing to higher inflation and increasing costs for consumers.
The recent price growth of agricultural commodities in the EU slowed significantly in the second quarter of 2023 compared to the same quarter of the previous year, while the average price of goods and services consumed in agriculture decreased for the first time since Q4 2020, indicating a stabilization of global agricultural markets after a period of disruption characterized by high output and input prices.
China's increased imports of corn from Brazil have contributed to a decrease in U.S. corn prices, as weakening demand and high supply take a toll.
A new study reveals that food prices in the United States have experienced an inflation rate of 5.7 percent compared to the global trend, with countries such as Venezuela, Lebanon, Argentina, Turkey, and Egypt being the most affected.
