Emerging markets across the globe that are struggling to get COVID-19 vaccines may be in for yet another serious challenge: food inflation. The United Nations Food and Agriculture Organization said last week that its global food price index hit its highest mark since September of 2011.
As groceries make up a bigger share of their inflation baskets, developing nations will be hit the hardest. For example, in the United Kingdom, food and non-alcoholic drinks make up nine percent of the averages family’s expenditures. However, in Kenya, it’s one-third of the total.
A Reuters article says May’s increase was the biggest month-on-month jump since 2010, which might mean social unrest. The rapid tripling of rice prices in 2008 from Thailand, one of the biggest exporters in the world, sparked rioting in West Africa.
The cereals part of the FAO index is just below 2008 levels. Experts say after the hardships caused by COVID-19, consumers in emerging markets likely will have lower tolerance levels for rapidly rising prices.