Food prices are starting to go down as inflation is easing up on consumers for the first time since the war in Ukraine started two years ago, the Financial Times reported.
According to a recent report by the Organization for Economic Cooperation and Development (OECD), in January and February 2024, 38 industrialized countries marked significant drops in consumer food prices, 6.2% and 5.3%, respectively.
Comparatively, the OECD report notes that in November 2022, the annual consumer food price change reached its peak at 16.2%.
The coronavirus pandemic, followed by the war in Ukraine caused major supply chain disruptions, resulting in lower trade and high prices. This and a looming energy and climate crisis was the perfect recipe for record inflation and acute food insecurity in 2023, according to the World Food Programme.
“We have seen the worst of high food inflation,” said Rabobank’s Carlos Mera, as cited by FT.
“Agricultural commodity prices have dropped significantly in the last two years, since the peak in prices that followed the invasion of Ukraine, and this is acting as a disinflationary force even at [the] retail level,” Mera added.
February saw a general slowdown in the inflation of food prices in industrialized nations, with the most recent OECD estimate having fallen by half or almost half from previous highs.
The annual inflation rate of food prices in the United States fell to 2.2% in February from 11.4% in August 2022, the highest level since May 2021.
Food and non-alcoholic beverage costs increased by 5% in the UK in the year that ended in February, which is the lowest since the beginning of 2022 and far less than the 19.2% increase that occurred in March 2023, a 45-year high.
For the first time since November 2021, the annual rate of food and non-alcoholic beverage price increases in the Eurozone decreased to 2.7% in March.
