The Wall Street Journal (WSJ), in an analysis of food price inflation, states that for decades globalization has increased the variety and reduced the cost of food. Now the pandemic, war in Ukraine and other global disruptions have shown how that complex supply chain can also result in more turbulent prices.
Among the factors pushing up prices, food-industry executives and economists say, have been manufacturing and transport disruptions stemming from the pandemic and the impact of the war in Ukraine on energy and grain prices. While those issues may recede, and some suppliers say they will try to source from closer to home, analysts expect price swings to be more frequent.
In modern times, the volume and variety of food crossing borders jumped as the world globalized. The U.S. imported about 18.3 percent by value of its food and beverages in 2020, up from 13.2 percent in 2008, according to the Agriculture Department. Globally, the share of wheat consumption sourced from abroad rose to 25% in 2019 from 17% in 1995, according to the International Food Policy Research Institute.
Consumers aren’t about to lose their taste for affordable global cuisine. But they should expect further bouts of volatility as disruptive events hurt the supply chains that brought that choice at those prices.
Republished by Live Mint, Bangkok Post, chof360 (UK), Beam Start, Chosun Biz (China), Hank Yung (Korea), Newsis (Korea), and Ground News.