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Home Agro-Market

Low-income countries hit hardest by global food price inflation

by Agriwatch
July 23, 2025
in Agro-Market
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Low-income countries hit hardest by global food price inflation
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The sustained increase in global food prices has had a profound impact on food security and nutrition, particularly in low-income countries where households spend a larger share of their income on food. A special event held today at the United Nations headquarters, on the margins of the ECOSOC High-Level Political Forum (HLPF), examined the drivers and consequences of the 2021–2023 food inflation crisis, as well as the policy responses needed to mitigate its effects.

“We need a balanced set of actions at all levels, addressing both the demand and supply sides. The [upcoming] 2025 edition of the State of Food Security and Nutrition (SOFI) report outlines key policy responses to strengthen countries’ capacities and transform agrifood systems to better withstand future shocks,” FAO Director-General QU Dongyu said in a video message to the meeting. The SOFI 2025 report is set for release on 28 July at the Second United Nations Food Systems Summit Stocktake (UNFSS+4) in Addis Ababa.

Since 2020, food price inflation has consistently outpaced overall inflation, reflecting heightened volatility in agricultural markets and persistent pressures within agricultural and food markets. In January 2023, food inflation peaked at 13.6 percent, exceeding headline inflation by 5.1 percentage points. Although both indicators had begun to decline by mid-2023, they remained elevated through the end of the year. By 2024, food inflation had returned to the pre-pandemic levels of 2019. However, the lasting effects remain: after five years, food prices around the world have increased by more than 35 percent while average prices in the economy have risen by 25 percent.

The surge in food prices can be attributed to a combination of global exogenous shocks: the COVID-19 pandemic, the war in Ukraine, and extreme weather events – all of which disrupted supply chains and drove up agricultural commodity prices. These shocks were further exacerbated by surging energy prices, expansive fiscal spending, and loose monetary policies, creating a ‘perfect storm’ for food inflation. Together, these factors significantly affected both the supply and demand sides of food markets.

Disproportionate impact on low-income countries

Low-income countries have borne the brunt of rising food prices. While global median food inflation rose from 2.3 percent in December 2020 to 13.6 percent in early 2023, it peaked at 30 percent in low-income countries in May 2023. At the height of the crisis in January 2023, 65 percent of low-income countries and 61 percent of lower-middle-income countries – home to over 1.5 billion people – experienced food inflation rates above 10 percent.

Such levels of food inflation have hindered attempts to boost global food security and nutrition. A 10 percent increase in food prices in low-income countries is associated with a 3.5 percent rise in moderate or severe food insecurity and a 1.8 percent increase in the proportion of individuals experiencing severe food insecurity. Structural and gender inequalities amplify these effects, especially in countries with high income disparities.

One concerning trend is that recent decline in global commodity prices has not fully translated into lower consumer prices in low-income countries, prolonging the burden on vulnerable populations.

SOFI 2025 will recommend a combination of policy responses to food price inflation and emphasizes the role of policy coordination across countries. These include targeted and time-bound fiscal measures, such as social protection programs to safeguard vulnerable households; credible and transparent monetary policies to contain inflationary pressures; and strategic investments in agrifood R&D, transport and production infrastructure, and market information systems to improve productivity and resilience.

Source : Food and Agriculture Organization

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