Coronavirus pandemic increases food prices across the world

The initially very sharp fall in demand led to a decrease in the prices of some items, such as fuel, in the “basket” of goods and services used to calculate the consumer price index (CPI). As a result, consumer price inflation slowed down at the global level from about 4 per cent in the first quarter of 2020 to about 2.5 per cent in the second quarter

Since the beginning of the pandemic, an increasing number of people have lost their jobs or been obliged to work fewer hours (whether from home or otherwise), thereby experiencing a drop in their income. Consequently, the demand for many non‑essential goods and services has plummeted.

The initially very sharp fall in demand led to a decrease in the prices of some items, such as fuel, in the "basket" of goods and services used to calculate the consumer price index (CPI). As a result, consumer price inflation slowed down at the global level from about 4 percent in the first quarter of 2020 to about 2.5 percent in the second quarter. As lockdown measures were subsequently eased, consumer price inflation picked up slightly but still remained below the pre‑pandemic level. In August 2020, the prices of all goods and services were on average 2.7 percent higher than in August 2019.

On the other hand, owing to COVID-19-related supply disruptions and the strong demand from consumers stockpiling food and medical supplies, but also personal care products, cleaning products, and toilet paper, the prices of these goods have increased substantially. As can be seen in the chart below, the food component of the CPI has increased at a much faster rate than the overall CPI in all regions of the world. Globally, in August 2020, the prices of food products were on average 5.5 percent higher than in August 2019.

Increases in food prices can have a major impact on the living standards of lower‑income households, which generally spend most of their income on food. Even a small increase can confront the members of such households with difficult decisions. Rising food prices and job losses triggered by the COVID-19 pandemic have the potential to undermine progress towards the Sustainable Development Goals and could even spark social unrest.