Global food prices have climbed closer to a record high as inflation persists around the world.
A United Nations gauge of global food prices rose 1.2% in November, threatening to make it more expensive for households to buy groceries.
It’s more evidence of inflation soaring in the world’s largest economies and may make it even harder for the poorest nations to import food, worsening hunger globally.
Prices have jumped for multiple reasons that include bad weather, higher shipping rates, worker shortages and an energy crunch that has impacted supply chains. The current rally is evoking memories of food price spikes in 2008 and 2011 that contributed to global crises.
November’s price rises were driven by grains and dairy, while prices of vegetable oils and meat declined. Higher food prices are pressuring consumer budgets that have already been strained by the COVID-19 crisis and high energy costs.
It’s looking likely that shoppers will feel the effects of inflation for months to come as economies re-open in the wake of the pandemic. That’s creating a policy dilemma for central banks over how fast to dial back stimulus measures.
Earlier this week, Federal Reserve Chairman Jerome Powell said its next meeting should discuss whether to wrap up bond purchases a few months sooner than expected, and retired the word "transitory" to describe high inflation.
