The Effects of Inflation in the Global Food Market

The global inflation rate reached its peak in 2022, reaching 7.4%, and is projected to decrease to 4.85% by 2023. Over the past two years, 37 out of 44 developed economies was influenced by inflation. During the first quarter of 2022, Turkey experienced an inflation increase of 54.8% making it one of the top economies to experience the highest inflation rate.

According to the Morgan Stanley Research, food prices have increased by 65% globally within the last two years. The general consumer price index (CPI) increased by 0.7% over the course of two months between August to September 2022. The CPI level also differs depending on grocery purchases and restaurant purchases. For instance, the CPI for grocery purchases was 13% higher than September 2021. The CPI for restaurant purchases was 8.5% higher than September 2021.

With leading factors such as the global pandemic, as well as the war between Ukraine and Russia, it has resulted in a major constraint on the supply chain within the food industry globally. The surge in prices involves wheat and several edible oil ingredients because both countries are major exporters of those ingredients. According to the World Bank, some of the major risks within the food industry includes, “…supply disruptions, higher input costs, and policy restrictions.”