Covid-19 is driving up food prices all over the world

 ILO, Dec 2020

The COVID-19 pandemic, along with the associated lockdowns, mobility restrictions and physical distancing rules, has not only led to a significant increase in unemployment and considerable income losses for many people, but has also altered the spending patterns of consumers and the level of price inflation that they face. In particular, the lockdown measures have affected the supply of and demand for certain products and, hence, their prices. 

 

Since the beginning of the pandemic, an increasing number of people have lost their jobs or been obliged to work fewer hours (whether from home or otherwise), thereby experiencing a drop in their income. Consequently, the demand for many non‑essential goods and services has plummeted.

The initially very sharp fall in demand led to a decrease in the prices of some items, such as fuel, in the “basket” of goods and services used to calculate the consumer price index (CPI). As a result, consumer price inflation slowed down at the global level from about 4 per cent in the first quarter of 2020 to about 2.5 per cent in the second quarter. As lockdown measures were subsequently eased, consumer price inflation picked up slightly but still remained below the pre‑pandemic level. In August 2020, the prices of all goods and services were on average 2.7 per cent higher than in August 2019.

On the other hand, owing to COVID-19-related supply disruptions and the strong demand from consumers stockpiling food and medical supplies, but also personal care products, cleaning products and toilet paper, the prices of these goods have increased substantially. As can be seen in the chart below, the food component of the CPI has increased at a much faster rate than the overall CPI in all regions of the world. Globally, in August 2020, the prices of food products were on average 5.5 per cent higher than in August 2019.

 

In full: https://ilostat.ilo.org/covid-19-is-driving-up-food-prices-all-over-the-world/?utm_source=rss&utm_medium=rss&utm_campaign=covid-19-is-driving-up-food-prices-all-over-the-world

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