Dhaka, Thursday, 30 June 2022

Another round of price hikes in poor countries this year

Another round of price hikes in poor countries this year

The COVID-19 pandemic has been going on globally for more than two years and it has changed everything. It has also had a major impact on the consumer market. When the world went into lockdown in 2020, it was thought that food prices could rise.

Although food prices were fairly normal in the early days of the lockdown, food prices began to rise at an alarming rate a few months later when the pandemic in the developed world subsided and economic activity resumed. According to an index from the Food and Agriculture Organization of the United Nations, food prices in May 2021 increased by 40 percent compared to the previous years.

This was the highest rate of food price inflation since 2011. Even at the beginning of 2022, different countries were being forced to go to lockdown due to COVID-19. Another major reason for the rise in food prices was the outbreak of swine flu in China in 2018. The number of pigs in China dropped by almost half due to swine flu.

As a result, between 2019 and 2020, China was forced to import large quantities of alternative sources of pork and protein, such as poultry and fish. At that time, it had an impact on the global food market. By mid-2021, China was expected to have largely recovered from the swine flu pandemic. But recent indications are that the disease has re-emerged in China.

This will have an impact on the food market as before, and the effects of COVID-19 as well as China's swine flu will continue to destabilize the food market throughout 2022. Another reason for price hike is that international trade has resumed before the COVID-19 pandemic is over. Due to the huge demand, food items like fresh fruits and vegetables are often being transported on passenger planes. As a result, transportation costs are going up.

Indigestible foods like rice, pulses, and sugar are usually transported by ship. But due to limited transportation, rising oil prices, etc., the cost of transporting ships has also increased. These are also contributing to the rise in food prices. This year these problems may be solved but it will be very slow. But scientists believe the temperature in the Pacific Ocean will remain low throughout the winter this year, as it did last year.

As a result, the weather will be dry and there will be drought. Due to climate change, natural disasters like floods and wildfires have also increased. Crop production may also be disrupted due to various natural disasters and this may affect the food market. However, there is nothing to be worried about. Despite the recent inflation, food prices are likely to be lower this year than in 2007-08. At that time, the food crisis became a worldwide problem.

Most countries avoided food security measures, such as export bans and stockpiling, which highlighted the crisis at the time. Another thing is that people now consume more processed foods. So, the impact of higher raw material prices affects the retail market. However, as people in poorer countries eat less processed foods, the impact of rising agricultural prices can be affected in the markets of these countries.

In addition, the devaluation of the local currency, the reduction of people's income due to Covid-related restrictions, can make life difficult for people in poor countries. Vaccines can be a remedy. So that the restrictions on COVID-19 will be relaxed and business will continue smoothly. Unfortunately, even in this case, the chances of rapid improvement are still in progress.