Russia's invasion pushed global food prices to record high
Food prices soared to record highs last month, as the war in Ukraine exacerbated what was already a global crisis.
Why it matters: In poorer countries where folks spend upward of 50% or more of their income on food, these numbers are devastating.
- In March, the food price index published by the United Nations Food and Agriculture Organization surged to its highest level since the index's inception in 1990.
State of play: The tools that central banks are using to fight inflation — rate hikes, quantitative tightening — are meant to curtail demand, but can do little to address global supply problems.
- "Raising rates will not resolve the war or address the supply chain," said Jean Boivin, head of the BlackRock Investment Institute.
Behind the numbers: The index tracks a basket of commodities including cereals, vegetable oils, dairy, meat and sugar.
- The prices of wheat and sunflower oil, in particular, are rising because of the war. Some Ukrainian ports are closed and others face disruptions.
- Issues will certainly drag into next year as some farmers in Ukraine — the leading sunflower-oil exporter and a top grains supplier — are unable to plant crops.
What's next: The U.S. is also struggling with rising food prices. Expect to hear more about that Tuesday morning, when the March Consumer Price Index is released.