Are we in for a decade of record food prices?

"The era of cheap food is over. The world must adapt to this new reality," says Rob Vos, senior research fellow at the International Food Policy Research Institute (IFPRI).

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Illustration, Photo: Shutterstock
Illustration, Photo: Shutterstock
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

In Brazil, caffeine lovers have started switching to a powdered "coffee-flavored drink," while American restaurants have imposed a surcharge on egg dishes.

From olive oil to orange juice to cocoa, the prices of certain foods have skyrocketed around the world in the past few years.

Overall food prices reached record highs after the Russian invasion of Ukraine in 2022.

In the meantime, they have declined slightly, but they are still higher than at most times in the last six decades.

Experts say it's part of a trend influenced by factors that seem unlikely to pass.

"The era of cheap food is over. The world must adapt to this new reality," says Rob Vos, senior research fellow at the International Food Policy Research Institute (IFPRI).

How high are the prices?

Food prices reached record highs after Russia's invasion of Ukraine in 2022, according to the Food Price Index of the UN Food and Agriculture Organization (FAO).

It tracks five food product categories: vegetable oils, cereals, meat, sugar and dairy products, but also provides an overall figure that tracks all five together.

The index shows that food prices in real terms, meaning the figures take into account the amount of general inflation, reached record highs in March 2022.

They declined in 2023, but slowly rose again last year.

José Eustacio Diniz, an expert in demography and economics, and former professor at Brazil's National School of Statistical Sciences, says this decade has seen the highest average food prices in real terms in the last 100 years.

He sees this trend as a "serious" risk to global food availability.

The last time food prices reached record highs was in 1974 and 1975, following the 1973 oil crisis, which raised prices in several industries, including food production and transportation.

War and fertilizer

The conflict in Ukraine has destabilized world food markets, especially because Russia and Ukraine are major exporters of wheat and sunflower oil, and Ukraine is a key exporter of corn.

Prices for them soared in early 2022 after Russia blocked Ukrainian ports, but an agreement between the two sides, and later new waterways, allowed Ukraine to resume exports.

Monika Totova, a senior economist at the FAO, says the impact was not, in the end, as devastating as many feared.

However, the conflict has also highlighted another cause for concern among farmers - the price of fertilizer.

Natural gas is crucial for fertilizer production.

The price of fertilizer was already high, but it jumped further in 2022 when the conflict in Ukraine increased gas prices, which contributed to a spike in food prices.

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Production, nutrition and demand

However, there are also long-term factors at work.

"The era of low food prices was a consequence of the great leap in agricultural production since the 1970s," says Voss of the International Food Policy Research Institute.

This period saw the "Green Revolution" - a widespread switch to high-yielding plant varieties and intensive farming techniques.

But this growth in production has now slowed and, as demand for food has increased, prices have risen on average, he says.

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Demand is particularly growing in developing countries, where populations are growing and diets are changing.

"People are consuming more meat, dairy products, fruits and vegetables," says Diniz.

"However, production in these sectors has not kept pace with demand, making food more expensive."

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Climate changes

Climate change is also having some impact.

Rising temperatures could increase food inflation by as much as 3,2 percent per year by 2035, a joint study by the European Central Bank and the Potsdam Institute for Climate Impact Research concluded last year.

Climate change has been slowing agricultural production growth over the past 60 years, according to a 2022 World Bank report.

He warns of a potential "tipping point" when climate impact wipes out all future progress in increasing production - which he says could be "devastating".

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Most agricultural production, which depends on weather conditions, is "an extremely uncertain business," says Totova.

Certain products, such as olive oil, coffee, and cocoa, are particularly vulnerable, she explains, because they depend on perennial trees, and production is concentrated in just a few countries.

The price of olive oil skyrocketed, for example, in 2023 and 2024, after extreme heat waves hit southern Europe in both years, bringing drought to Spain and other olive oil-growing areas.

Scientists from the World Weather Attribution Initiative (WVA) at Imperial College London say the hot temperatures would be "virtually impossible" without human-caused climate change.

Coffee harvests have also been affected by extreme weather conditions.

The price of Arabica coffee beans soared to record highs on international commodity markets in February, with two years of drought in Brazil among contributing factors.

Researchers from the VVA said climate change was the main driver of the exceptionally dry weather conditions of 2023.

Pests and diseases

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In the US, an outbreak of bird flu has led to the extermination of tens of millions of chickens.

The price of a dozen eggs has more than tripled since 2021, reaching a record high of $6,23 in March, according to the U.S. Census Bureau.

Donald Trump has blamed the high prices on the policies of his predecessor, Joseph Biden, while activist groups and some Democratic lawmakers have expressed concern that producers are artificially keeping egg prices high.

Bird flu has also pushed up egg prices elsewhere in recent years, including in South Africa, Australia and Japan, although the impact varies from country to country.

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The price of orange juice also jumped, reaching record highs on commodity markets in September last year.

Harvests in Brazil and the US have been hit by citrus greening, a disease carried by a pest that sucks fruit juice, turns the fruit bitter and slowly kills the trees.

Droughts in Brazil and hurricanes in Florida have also hit production.

Prices have now, however, dropped.

Customs and trade uncertainties

Disruptions to world trade, including recent tariffs imposed by US President Donald Trump on goods entering the US can also affect food prices.

Unpredictability is one of the problems for farmers.

"If a trade war breaks out and tariffs are imposed," says Totova, "they could lose key export markets, which would force them to adjust production in the middle of the season."

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And there can be a domino effect.

For example, when China imposed tariffs on American soybeans in retaliation, Chinese importers turned to other suppliers such as Brazil, but they may not be able to meet demand, so import prices have soared, according to a recent World Bank report.

Vos says it's unclear whether the US tariffs will have an impact on rising food prices worldwide, or whether they will lead to a global slowdown in economic growth that could lower prices.

Even if there is a slowdown, he warns, food price inflation could remain high in many low- and middle-income countries.

This is because a drop in demand for those countries' own exports could weaken their currencies, making food imports more expensive, he explains.

There is "no certainty about exactly how everything will turn out in the end," he says, "but overall there is very little good news on the horizon."

Feeling the cost

Although food prices have fallen on the global market since 2022, that does not mean that the prices paid by customers in stores everywhere have also fallen.

Davit Mekonnen, senior economist at the World Bank's Prospects Group, says that in many countries food prices are still significantly higher than they were four years ago, and this has "substantially eroded food availability."

Malnutrition is on the rise in the world.

It reached a low point of 7,1 percent of the world's population in 2017, but has now jumped back up to 9,1 percent, according to FAO data.

More than a third of the world's population cannot afford a healthy diet, including almost two-thirds of Africa's population, according to the most recent FAO estimate.

Some economists predict that food prices could ease somewhat over the next 12 months, but most experts expect more volatility ahead.

"The forces that are pushing up prices - rising production costs, supply chain disruptions, climate change and trade policy - are not going to go away," Vos warns.

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