Latest Update – April 24, 2023 

Domestic food price inflation remains high around the world. Information from the latest month between December 2022 and March 2023 for which food price inflation data are available shows high inflation in almost all low- and middle-income countries, with inflation levels greater than 5% in 70.6% of low-income countries, 90.9% of lower-middle-income countries, and 87.0% of upper-middle-income countries and many experiencing double-digit inflation. In addition, 84.2% of high-income countries are experiencing high food price inflation. The most-affected countries are in Africa, North America, Latin America, South Asia, Europe, and Central Asia.

Download the latest brief on rising food insecurity and World Bank responses

The agricultural, cereal, and export price indices closed 3%, 2% and, 8% higher respectively compared to two weeks ago. The increase in export price index was driven by a rise in coffee prices which increased by 11%. Among the cereals, maize prices closed 4% higher, wheat prices closed 1% lower, while rice prices closed at the same level compared to two weeks ago. On a year-on-year basis, maize and wheat prices are 14% and 36% lower, respectively, while rice prices are 16% higher. Compared to January 2021, maize and wheat prices are 31% and 6% higher respectively, while rice prices are 4% lower (See “pink sheet” data for agricultural commodity and food commodity prices indices, updated monthly.)

According to a recent report from the FAO, the benchmark index of international food commodity prices declined for the 12th consecutive month in March 2023. The FAO Food Price Index averaged 126.9 points in March 2023 — 2.1% lower than in February 2023 and 20.5% lower than its peak in March 2022. The index, which tracks monthly changes in international commodity prices, indicated that a combination of factors, including ample supplies, subdued import demand, and extension of the Black Sea Grain Initiative, contributed to the decrease. In 2019, prior to COVID-19, the FAO Food Price Index stood at 95.1 points.

A recent blog from the International Food Policy Research Institute (IFPRI) discusses developments in biofuel production, provides arguments for and against the policies that support and promote it, and considers alternative mechanisms that could mitigate the impacts of such policies on food prices. The blog suggests that, despite criticism expressed during previous price spikes, biofuel policies will continue to increase in popularity. Given ongoing concerns regarding Russia’s invasion of Ukraine, the blog suggests that it is important to verify the contribution of biofuels to mitigation of climate change and develop greater flexibility when markets are tight, and prices are high. In addition, development of waste products and crop residues as feedstock for biofuels would allow for all the benefits associated with biofuel mandates without increasing competition for food use. Although this is technically feasible, such feedstocks remain costlier than food crops, and more research must be conducted to increase commercialization of waste and crop residue.

The National Oceanic and Atmospheric Association (NOAA) Climate Prediction Center has issued an El Niño Watch as part of its April 2023 El Niño Southern Oscillation (ENSO) Outlook. The watch was issued in response to enabling conditions in the development of El Niño within the next six months. Currently, the world is still in an ENSO-neutral phase, in which neither El Niño nor La Nina is present. However, NOAA indicates that there is a 62% chance that El Niño will develop sometime between May and July, and more than an 80% chance of El Niño developing by the fall. The likely return of the El Niño weather phenomenon, exacerbated by global climate change, could increase the odds of record-breaking average global temperatures in 2023 or 2024.

Following Russia’s invasion of Ukraine, trade-related policies imposed by countries have surged. The global food crisis has been partially made worse by the growing number of food trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices. As of March 13, 2023, 23 countries have implemented 29 food export bans, and ten have implemented 14 export-limiting measures.

According to the Global Report on Food Crisis 2022 Mid-year Update, up to 205 million people are expected to face acute food insecurity and to be in need of urgent assistance in 45 countries.

World Bank Action

As part of a comprehensive, global response to the food security crisis, in April 2022 the World Bank announced that it is making up to $30 billion available over a period of 15 months, including $12 billion in new projects. The financing is to scale up short- and long-term responses along four themes to boost food and nutrition security, reduce risks, and strengthen food systems: (i) support producers and consumers, (ii) facilitate increased trade in food and trade inputs, (iii) support vulnerable households, and (iv) invest in sustainable food and nutrition security.

The Bank has achieved its target of making $30 billion commitment for food and nutrition security response. Between April to December 2022, the Bank’s food and nutrition security commitments in new lending have passed the $12 billion mark – with almost half for Africa, which is one of the hardest hit regions by the food crisis. Some examples include:

1. The $766 million West Africa Food Systems Resilience Program is working to increase preparedness against food insecurity and improve the resilience of food systems in West Africa. The program is increasing digital advisory services for agriculture and food crisis prevention and management, boosting adaption capacity of agriculture system actors, and investing in regional food market integration and trade to increase food security. An additional $345 million is currently under preparation for Senegal, Sierra Leone and Togo.
2. A $150 million grant for the second phase of the Yemen Food Security Response and Resilience Project, which will help address food insecurity, strengthen resilience and protect livelihoods.
3. $50 million grant of additional financing for Tajikistan to mitigate food and nutrition insecurity impacts on households and enhance the overall resilience of the agriculture sector.
4. A $125 million project in Jordan aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
5. A $300 million project in Bolivia that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
6. A $315 million loan to support Chad, Ghana and Sierra Leone to increase their preparedness against food insecurity and to improve the resilience of their food systems.
7. A $500 million Emergency Food Security and Resilience Support Project to bolster Egypt’s efforts to ensure that poor and vulnerable households have uninterrupted access to bread, help strengthen the country’s resilience to food crises, and support to reforms that will help improve nutritional outcomes.
8. A $130 million loan for Tunisia, seeking to lessen the impact of the Ukraine war by financing vital soft wheat imports and providing emergency support to cover barley imports for dairy production and seeds for smallholder farmers for the upcoming planting season.
9. The $2.3 billion Food Systems Resilience Program for Eastern and Southern Africa, helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. The program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.

In May, the World Bank Group and the G7 Presidency co-convened the Global Alliance for Food Security, which aims to catalyze an immediate and concerted response to the unfolding global hunger crisis. The Alliance has developed the publicly accessible Global Food and Nutrition Security Dashboard, which provides timely information for global and local decision-makers to help improve coordination of the policy and financial response to the food crisis.

The heads of the FAO, IMF, World Bank Group, WFP, and WTO released a Third Joint Statement on February 8, 2023. The statement calls to prevent a worsening of the food and nutrition security crisis, further urgent actions are required to (i) rescue hunger hotspots, (ii) facilitate trade, improve the functioning of markets, and enhance the role of the private sector, and (iii) reform and repurpose harmful subsidies with careful targeting and efficiency. Countries should balance short-term urgent interventions with longer-term resilience efforts as they respond to the crisis.

Last Updated: Apr 24, 2023