The International Monetary Fund (IMF) Blog reports that one year after Russia's invasion of Ukraine destabilized agricultural commodity markets, food prices remain elevated despite a decline from their all-time highs in the beginning of 2022.
As two of the world's largest exporters of wheat and other essential crops enter their second year of conflict, many vulnerable nations continue to face heightened food insecurity. One billion people reside in fragile and conflict-affected states, which are at particular risk.
The Food and Agriculture Organization of the United Nations reported on Friday that eleven consecutive monthly declines have led to a 19 percent drop in food prices since their peak in March.
As depicted in the Chart of the Week, inflation-adjusted prices in February remained above the average level for recent years, although they have returned to levels seen prior to the Ukraine conflict. The composition of the FAO Food Price Index reveals that vegetable oils, dairy, and cereals drove the price decline, while sugar and meat have remained relatively unchanged since the beginning of last year.
In a recent joint statement on food security, the IMF and other global institutions stated that governments and donors must increase support for the most vulnerable, facilitate trade and market functioning, and eliminate harmful subsidies.
The FAO, IMF, World Bank, World Food Programme, and World Trade Organization stated on February 8 in their third statement since July on the global food and nutrition security crisis that "more concerted action across these three key areas is required to prevent a prolonged crisis."
The new Food Shock Window of the IMF has thus far aided Guinea, Haiti, Malawi, and Ukraine. In addition, nine countries experiencing acute food insecurity benefited from IMF financial assistance through new or existing programs, with a focus on bolstering social safety nets and policies to mitigate the effects of the food crisis.
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