Are Prices At the Grocery Store About to Jump?
May 3, 2021
A handful of commodities that serve as the foundation for much of the world’s diet have become more expensive, causing concern that grocery bills may soon be climbing.
Bloomberg reports that the Bloomberg Agriculture Spot Index, which tracks key agricultural products like corn, wheat, soy, and vegetable oils, has surged to its highest level since 2014. Climbing food inflation could bring additional hardship to households already grappling with economic hardship brought on by the pandemic, and could lead to food shortages and hunger in the developing world.
The recent spike follows months of price gains, driven by booming demand from China and adverse weather in Brazil and the United States. Corn prices have doubled in the last year, soybeans are up nearly 80%, and wheat prices have climbed 30%. Economists who spoke to Bloomberg said prices are expected to keep climbing.
Governments around the world have already begun to take action to combat climbing food prices. Russia has ordered a freeze on some food prices, and Bolivia has halted beef exports in an effort to shore up domestic supply.
Corporations have also begun to feel the squeeze from higher commodities prices. Nestle, the world’s largest food company, has acknowledged that it will not be able to hedge all of its commodity costs and will be raising prices where appropriate.