Global food prices extended their rally to the highest in almost a decade, heightening concerns over bulging grocery bills as economies struggle to exit the Covid-19 crisis.
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A United Nations gauge of world food costs climbed for a 12th straight month in May, its longest stretch in a decade. Higher food costs can accelerate broader inflation, complicating central banks efforts to provide more stimulus.
Drought in key Brazilian growing regions is crippling crops from corn to coffee, and vegetable oil production growth has slowed in Southeast Asia. That’s boosting costs for livestock producers and risks further straining global grain stockpiles that have been depleted by soaring Chinese demand.
The prolonged gains across the staple commodities are trickling through to store shelves, with countries from Kenya to Mexico reporting higher food costs. The pain could be particularly pronounced in some of the poorest import-dependent nations, which have limited purchasing power and social safety nets as they grapple with the pandemic.
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“Global food prices rose in May at their fastest monthly rate in more than a decade,” the UN’s Food and Agriculture Organization said in a statement on Thursday. “A surge in the international prices of vegetable oils, sugar and cereals led the increase in the index.”
The UN’s index is treading at its highest since September 2011, with last month’s gain of 4.8% being the biggest in more than 10 years.
The surge has also stirred memories of 2008 and 2011, when price spikes led to food riots in more than 30 nations. The world’s hunger problem has already reached its worst in years as the pandemic exacerbates food inequalities, compounding extreme weather and political conflicts.
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