Food inflation is an economic challenge and a humanitarian and geopolitical issue

Food inflation has significant and far-reaching consequences for individual countries and the global economy as a whole.
A large portion of income in developing nations is spent on food. Therefore, rising prices force households to cut back on nutrition, worsening malnutrition and poverty.
Net food-importing countries experience trade deficits, while exporting nations see temporary surpluses.
Rising prices have seen disrupting global trade flows as countries impose export bans to secure domestic supply.
Food inflation, obviously, contributes to global inflation, complicating policy decisions for central banks and increasing borrowing costs worldwide.
A recent World Bank report has shown domestic food price inflation remains high in many low- and middle-income countries.
Inflation higher than 5% is experienced in 68.8% of low-income countries (1.2 percentage points lower since the last update on November 15, 2024), 46.7% of lower-middle-income countries (1.1 percentage points lower), 33% of upper-middle-income countries (3.0 percentage points lower), and 10.9% of high-income countries (1.8 percentage points higher).
In real terms, food price inflation exceeded overall inflation in 59.8% of the 164 countries where data is available.
In the November 2024 edition of its biannual ‘Food Outlook’, UN’s Food and Agricultural Organisation (FAO) indicates that global food production is experiencing diverse trends across commodities. Declines are projected for wheat, maize, and sugar, whereas outputs of dairy, fisheries, meats, oilseeds, and rice are expected to grow.
These shifts have implications for global consumption, trade, and stock levels, although food production remains highly sensitive to disruptions from adverse weather conditions, geopolitical conflicts, and policy changes. These factors threaten the balance between supply and demand, potentially undermining global food security. The ‘food outlook’ also describes significant changes in the fertilizer market. After a challenging 2022 marked by high costs and limited production, 2023 saw notable recovery.
In 2024, nitrogen production is expected to remain stable, phosphate production to decline slightly, and potassium to continue its growth trajectory. Lower natural gas prices, a key input for nitrogen fertilisers, have been instrumental in stabilising production costs. According to the WFP 2025 Global Outlook, an estimated 343mn people are acutely food insecure across 74 countries where WFP operates—10% more than in 2023 and nearly 200mn more than before the pandemic.
An estimated 1.9mn people are on the brink of famine in 2024, primarily in Gaza and Sudan but also in Haiti, Mali, and pockets of South Sudan. Conflict, economic factors, and climate remain the main drivers of food insecurity, with 65% of acutely food-insecure people living in fragile or conflict-affected situations.
Following the Russia - Ukraine war, trade-related policies imposed by countries have surged. The global food crisis has been partially made worse by the growing number of food and fertiliser trade restrictions put in place by countries with a goal of increasing domestic supply and reducing prices.
As of this month, some 17 countries have implemented as many as 22 food export bans, and eight have implemented 12 export-limiting measures.
Food inflation is not only an economic challenge but also a humanitarian and geopolitical issue. Therefore, coordinated global efforts are crucial to mitigate its impact on vulnerable populations and ensure food security.