Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Canada’s most-awarded
newsroom for a reason
Stay informed for a
lot less, cancel anytime
“Exemplary reporting on
COVID-19” – Herman L
per week
for 24 weeks
Get full access to
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(}function setPanelState(o){dom.root.classList[o?"add":"remove"](,dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

A worker directs the unloading of government imported rice from a Vietnamese ship docked at a port in Manila on April 15, 2008.

REUTERS/Romeo Ranoco

The Middle East and Africa do not need more crises, yet another one is on the horizon.

Food prices have been climbing relentlessly in the past year and show no sign of slowing. A decade ago, during the last sustained price surge, food riots broke out in dozens of countries and the Arab Spring, which was at least partly owing to the atrocious cost of feeding families, ripped through North Africa and beyond, destroying Libya and Syria.

In recent months, the business sections of media sites have been stuffed with stories of commodities, such as copper, cobalt and iron ore, reaching record prices as economies leap back to life after their pandemic-induced recessions. Investors in Big Oil and Big Mining were delighted. The food rally has been largely ignored.

Story continues below advertisement

While rising food prices are good news for farmers and food traders and exporters, they are really bad news for the billions of people in low-income countries. In the United States, households spend less than 10 per cent of disposable income on food, according to the U.S. Department of Agriculture. The share has declined steadily since 1960, when the figure was 17 per cent.

In India, food consumes 30 per cent of household spending. In some parts of Africa, the figure is twice as high, as it is in Nigeria.

The price increases have been astonishing. The UN Food and Agriculture Organization (FAO) food price index, which tracks international prices over five groups (meats, dairy, cereals, vegetable oils and sugar), has climbed for 11 months in a row, taking it to the highest level since 2014. The April reading was up 1.2 per cent over March, pushing up the year-on-year rise to almost 31 per cent; it is now only 12 per cent below its record peak in early 2011.

Sugar, up almost 60 per cent, and maize (corn), up 67 per cent, showed the biggest yearly increases. In the United States, where much of the corn crop is used to make ethanol – a massive food-to-fuel diversion that low-income countries have blamed for pushing up prices – corn rose 83 per cent in a year.

The FAO index itself does not tell the whole story. Food inflation in some countries is dire, especially in those where the economy is falling apart and the currency is losing value. One is South Sudan, where the currency has collapsed. The FAO says the nominal prices for maize and sorghum have doubled in a year and are up 50 times since mid-2015. Pandemic-related supply disruptions also helped to push up prices.

In Zimbabwe, yearly food inflation in April was almost 220 per cent. In Nigeria, it was 23 per cent, the highest in 16 years. The rest of West Africa recorded similar increases.

Why is this happening? It’s hard to generalize, since specific regions have specific problems. Sugar prices are being propelled by a slow harvest in Brazil and frost damage in France, both of which have squeezed global supplies. Currency devaluations in some countries have pushed up local prices dramatically. A surge in Chinese wheat purchases, and possible hoarding of other food commodities, have propelled wheat prices. Climate change – more droughts and floods – has made harvests more unpredictable.

Story continues below advertisement

Farming is highly energy intensive and rising oil prices – up 115 per cent in the past year – have no doubt helped to lift prices, as they did in 2007 and 2008, when oil went to record levels. But today’s oil price is still only half of what it was back then, so the recent surge is only partly to blame.

The old economic adage that the best cure for high prices is high prices is certainly true. But the food rally could be closer to the beginning than to the end. In a recent report on the commodities “supercycle,” Goldman Sachs said it expects a “structural repricing higher of agricultural products in coming years.”

If Goldman is right, developing and low-income countries are in trouble. Most North Americans and Europeans are wealthy enough to absorb higher food (and fuel) prices. Elsewhere, rising food prices can be catastrophic.

The previous food crisis triggered riots in Egypt, Morocco, India, Indonesia, Bolivia, Pakistan, Sri Lanka and many other countries. Food shortages in central Tunisia unleashed protests that would morph into a revolution that started the Arab Spring revolutions in 2011. Food riots hit Venezuela in 2016 and 2017, when falling oil prices pushed the once wealthy economy into crisis.

Rising commodity prices are far more likely to damage the developing world than the rich world, all the more so if they fuel general retail inflation that has to be met with aggressive interest-rate hikes, as seems likely in Brazil, where consumer prices are galloping ahead and the central bank is tightening. The combination of rising interest rates and rising food prices is not pretty, and could take more than a few struggling countries to breaking point. We’ve seen this scenario before.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies