Restaurants outside Nairobi are reducing the size of their chapattis (crispy, chewy Kenyan flatbreads) to conserve cooking oil. Cash-strapped Pakistanis reluctantly become vegetarians, dropping beef and chicken from their diets because they can no longer afford meat. In Hungary, cafes are removing burgers and fries from their menus in an attempt to avoid the high cost of oil and beef.
Around the world, food prices are persistently and painfully high. Inexplicably. In global markets, prices for cereals, vegetable oils, dairy products and other agricultural commodities have fallen steadily from record highs. But relief has fallen far short of the real world, where shopkeepers, street vendors, and families are trying to make ends meet.
“I can’t afford lunch and dinner most days because I still have rent and school fees left over,” said Rinna Meuni, a Kenyan mother of four.
She says a 2-kilogram (4.4-pound) packet of corn flour costs twice as much as she makes in a day selling vegetables at a kiosk.
Food prices were already soaring when Russia invaded Ukraine last February, disrupting trade in grain and fertilizers, pushing prices even higher. It’s over.
Food prices have fallen for the 12th straight month, according to the United Nations. That’s because crops in countries like Brazil and Russia are doing well, backed by fragile agreements to allow grain shipments from the Black Sea during wartime.
The UN Food and Agriculture Organization food price index is lower than it was when Russian troops entered Ukraine.
Yet the exorbitant food prices that people have no choice but to pay continue to rise, disproportionately contributing to painfully high inflation, from the United States and Europe to struggling countries in the developing world.
Food markets are so interconnected that “wherever you are in the world, you feel the impact if global prices go up,” says economist and London-based director of the Global Development Center’s European Program. said co-director Ian Mitchell.
Why is food price inflation so unmanageable, if not for the global commodity markets? Bazaars, grocery stores and kitchen tables around the world.
Former USDA chief economist Joseph Glauber says prices for certain agricultural commodities (oranges, wheat, livestock) are just beginning.
In the United States, where food prices were up 8.5% last month year-over-year, “75% of the costs are incurred after leaving the farm. That’s energy costs. That’s all processing costs. All transportation costs. All labor costs.” is.”
And many of these costs are built into so-called core inflation. Core inflation leaves out volatile food and energy prices, which have proven stubbornly difficult to extract from the global economy. Food prices rose 19.5% year-on-year in the European Union and 19.2% in the UK last month, the biggest rise in nearly 46 years.
Glauber said food inflation “will come down, but it will come down more slowly, mainly because these other factors are still quite high.”
Others, including US President Joe Biden, see another culprit: the wave of mergers that have reduced competition in the food industry for years.
The White House last year claimed that just four meatpacking companies control 85% of the U.S. beef market. Dominating. Critics say these companies can and do use market power to push prices higher.
Glauber, now a senior fellow at the International Food Policy Institute, is not convinced that agribusiness consolidation is responsible for sustained food price inflation.
Indeed, large agribusinesses can profit when prices rise, he says. decrease.
“There are a lot of market factors, fundamentals right now that could explain why we have this kind of inflation,” he says.
Outside the US, a strong dollar keeps prices high, he said. In other recent food price crises, the dollar has not been particularly strong, as he was in 2007-2008.
“This time it was a strong dollar followed by a strong dollar,” Glauber said. They are not seeing the price declines seen in commodity markets and the United Nations Food Price Index.
In Kenya, drought fueled food shortages and high prices due to the effects of the war in Ukraine, and costs have remained stubbornly high ever since.
Maize flour, a staple food in Kenyan households used to make maize flour known as ugali, has doubled in price in the last year. Ended subsidies to moderate the rise. Nevertheless, he promised to reduce the price of corn flour.
Kenyan millers bought wheat last year when global prices soared. They have also battled high production costs resulting from higher fuel bills.
In response, small Kenyan restaurants like Mark Kioko’s have been forced to raise prices and sometimes reduce portions.
“We had to reduce the size of our chapattis because we were suffering because the price of cooking oil remained high even after we raised the price,” says Kioko.
In Hungary, people are increasingly unable to cope with the EU’s largest food price spike, which reached 45% in March.
In response to rising material costs, Cafe Csiga in central Budapest has increased its prices by almost 30%.
“Our chefs closely monitor prices every day, so the sourcing of kitchen ingredients is tightly controlled,” says Andras Kelemen, the restaurant’s general manager. Hamburgers and French fries have also been removed from the menu at the cafe.
Joszef Varga, who sells fruits and vegetables at Budapest’s historic Grand Market Hall, says wholesale costs have increased by 20% to 30%. All his customers are noticing the price spike.
“People with more money in their wallets buy more, and people with less buy less,” he said.
In Pakistan, shopkeeper Mohammad Ali said some customers don’t eat meat and instead stick to vegetables and beans.
Zubaida Bibi, a 45-year-old widow, sitting in her mud-brick house outside the capital Islamabad, said:
This month, she stood in long lines to receive free wheat from the government of Prime Minister Shahbaz Sharif during Ramadan, the holy month of Islam. Bibi works as a maid and she earns only 8,000 Pakistani Rupees ($30) a month.
“I have many other needs, but I don’t have the money to buy food for my children,” she said.
She gets money from her brother Shah Khan to survive. But he is also vulnerable. Rising fuel costs may force roadside teahouses to close.
“Inflation went up and my budget was ruined,” he said.
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Weisman reported from Washington and Mousambi from Nairobi, Kenya. His AP reporter Munir Ahmed in Islamabad, Pakistan. Justin Spike in Budapest, Hungary. Contributed by Courtney Bonnell of London.
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See AP’s full coverage of the food crisis at https://apnews.com/hub/food-crisis.