Food prices are set to hit rock bottom

The primary driver behind the decline in food prices is ample supply of several key grains, particularly wheat and corn, buoyed by strong harvests in recent months, CNBC reported April 22. 

Farmers have boosted plantings of wheat and corn after prices surged in the wake of the Russia-Ukraine conflict in 2022, CNBC reported.

Wheat, corn and rice account for more than half of the world’s cereal demand. That means their price movements have an outsize impact on consumers’ food budgets. 

Even as wheat and corn prices have fallen sharply, rice costs are rising due to reduced global supplies tied to export restrictions by India, which accounts for roughly 40% of the world’s rice production.

Global food prices declined by 9% in 2023, according to the World Bank. The United Nations’ Food and Agriculture Organization said its world food price index reached its lowest level in three years in February 2024, but ticked up slightly in March as dairy, meat and vegetable oil prices rose.

Oxford Economics lead economist Kiran Ahmed said food prices were poised to decline by another 5.6% this year but could rebound next year due to adverse weather. Ahmed warned that elevated rice prices could lead India to impose further export barriers.