'Almost surprising everyone': Increasing demands cause rising food prices globally

Economics
Groceryshopper
U.S. grocery shoppers may be feeling the effects of food prices rising globally. | Adobe Stock

Grocery shoppers might feel the pinch of rising prices because of increased demands, global use of food and droughts impacting crop production.

The United Nations reported the sharpest price rise happened in May, as opposed to last year, the United States food prices are up 2.4%, while fruit and vegetable prices rose 3.3%.

"The demand, really I would say, is almost surprising everyone," Abdolreza Abbassian, senior economist for the U.N. Food and Agriculture Organization (FAO), told CNN Business. "This demand requires a strong supply response."

This food price inflation has been impacting food items, such as meats, cereals and oilseeds. The FAO's food price index reported the cereal price index rose 6% and the vegetable oil price index jumped 7.8% in May, and the meat index rose 2.2% from April, according to Reuters.

"In the cereal sector, there were a lot of problems in terms of what will happen with this year's production," Abbassian said in CNN Business. "There's a lot of talk about droughts in Brazil really affecting the corn market."

Concerns for Brazil's crop production have been in discussions since spring of this year. Excessive rainfall earlier this year delayed planting soybeans and corn; now, fields are dry.

The COVID-19 pandemic, in its ever-growing list of industries impacted by it, contributed to the difficulty of purchasing food.

Cargo movement slowed during the pandemic, according to Reuters.

The cost of shipping grains has doubled since 2020, Reuters said.

"Freight cost has become a real challenge as it comes when we see huge increases in grain prices," Phin Ziebell, an agribusiness economist at National Australia Bank in Melbourne, told Reuters.

Since hundreds of people lost their jobs during the pandemic, families can't keep up with inflated food prices.

“High food prices are hunger’s new best friend," said U.N. World Food Programme Chief Economist Arif Husain. "We already have conflict, climate and [the coronavirus] working together to push more people into hunger and misery. Now food prices have joined the deadly trio. If you’re a family that already spends two thirds of your income on food, hikes in the price of food already spell trouble. Imagine what they mean if you’ve already lost part or all of your income because of [the coronavirus].”