Food Prices Fall on World Market. So Why Are They Still High at the Grocery Store?

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The United Nations says food prices have fallen for 12 straight months, yet somehow exorbitant food prices that people have little choice but to pay are still climbing.

A restaurant on the outskirts of Nairobi skimps on the size of its chapatis — a flaky, chewy Kenyan flatbread — to save on cooking oil. Cash-strapped Pakistanis reluctantly go vegetarian, dropping beef and chicken from their diets because they can no longer afford meat. In Hungary, a cafe pulls burgers and fries off the menu, trying to dodge the high cost of oil and beef.are persistently, painfully high. Puzzlingly, too.

Yet somehow exorbitant food prices that people have little choice but to pay are still climbing, contributing disproportionately to painfully highFood markets are so interconnected that “wherever you are in the world, you feel the effect if global prices go up," said Ian Mitchell, an economist and London-based co-director of the Europe program at the Center for Global Development.

Food inflation, Glauber says, “will come down, but it’s going to come down slowly, largely because these other factors are still running pretty high.", see another culprit: a wave of mergers that have, over the years, reduced competition in the food industry. “There’s a lot of market factors right now, fundamentals, that can explain why we have such inflation," he says. “I couldn’t point my finger at the fact that we just have a handful of meat producers."

Corn flour, a staple in Kenyan households that is used to make corn meal known as ugali, has doubled in price over the last year. After the 2022 elections, President William Ruto ended subsidies meant to cushion consumers from higher prices. Nonetheless, he has promised to bring down corn flour prices.

In Hungary, people are increasingly unable to cope with the biggest spike in food prices in the EU, reaching 45% in March.

 

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