Rising energy costs have compounded supply chain disruption and crop failures to compound an already dire situation with global food prices, Bloomberg reported, citing UN data.
According to data, the UN’s World Food Index has risen by a third in the past 12 months and may continue to rise as energy costs skyrocket due to tight supply and high demand.
“It is this combination of things that is starting to become very worrying,” said Abdolreza Abbassian, senior economist at the Food and Agriculture Organization of the United Nations, as quoted by Bloomberg.
âIt’s not just the isolated food price figures, but all of them together. I don’t think anyone two or three months ago expected energy prices to get this high, âAbbasian added.
The energy crisis that hit Europe and then spread to Asia began with gas prices, which still hit multi-year highs due to limited supply and equally limited production from gas sources. ‘renewable energy.
This has boosted demand for petroleum and coal, also pushing up their prices and increasing pressure on the agricultural sector and related industries such as fertilizer production.
Food inflation has also been pushed up by growing demand for biofuels, spurred by the energy transition and emission reduction targets. Some have warned that the biofuel rush threatens rising prices for staple foods that double as raw materials for biofuels, such as corn and vegetable oil.
The US food industry is already expressing concern over this problem, which food producers and farmers have called “the diesel versus donuts debate as food and fuel compete for that oil,” according to agricultural economist and consultant David Widmar, quoted by the Financial Times.
âWe support renewable fuels and the green agenda, but soybean oil [prices] have tripled. Our members are worried that they will not be able to buy oil, âthe managing director of the American Bakers Association told the Financial Times in September.
By Irina Slav for Oil Octobers
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