3. Rising global food prices could presage social unrest
Axios Future author Bryan Walsh writes: Global food prices have been rising for months, putting additional pressure on the world's poorest people.
Why it matters: Past spikes in the price of food staples have been connected to periods of social unrest, including the Arab Spring. If prices continue to rise — on top of the pain of the pandemic — the world could be in for a bumpy future.
By the numbers: Global food prices rose by 2.4% in February, according to the Food and Agriculture Organization's Food Price Index.
- That marks the ninth straight month of price rises, causing the index — which is adjusted for inflation — to reach its highest level since July 2014.
Details: In the U.S., prices rose by nearly 3% in 2020, roughly double the rate of inflation, putting pressure on the poorest Americans, who spend more than one-third of their income on food.
Flashback: Governments are right to worry about the effects of rising food prices. Past spikes in 2011 helped fuel protests in the Arab world, and record-high prices in 2008 contributed to instability throughout the global South.
What they're saying: "These price spikes are destabilizing, not just because they induce a lot of hardship on communities and households, but also because there is this expectation that the government will do something about it," Cullen Hendrix, a nonresident senior fellow at the Peterson Institute for International Economics, told Bloomberg.
- "The implications are going to last longer and beyond the pandemic."
How it works: The food price spike has multiple interlocking causes: COVID-19 lockdowns "are a wrecking ball for food systems," notes Lawrence Haddad, the executive director for the Global Alliance for Improved Nutrition, while broader inflation and extreme weather events like February's winter storms in Texas play a role as well.
Yes, but: Prices are well below their 2011 peak, and there are signs that grain price increases are slowing even as wheat output is forecast to reach a record high of 780 million tonnes next season.
The bottom line: More than politics or the pandemic, it is food scarcity that will bring people out into the streets, which is likely to make the next few months unstable ones.