As the coronavirus pandemic penetrates more deeply into global supply chains, prices for key staples are starting to soar in some parts of the world, as reported by bloomberg.com.
Rice and wheat, crops that account for about a third of the world’s calories, have been making rapid climbs in spot and futures markets. For countries that rely on imports, this is creating an added financial burden. In Nigeria, for example, the cost of rice in retail markets soared by more than 30 percent in the last four days of March alone.
It is unclear what the biggest drivers were for the retail prices, whether it was a trickle-down effect from grain futures, local logistical choke points, panic buying, or a combination.
While global grain inventories have been plentiful for several years, the response to the virus is unleashing ripple effects making it harder for staples to get where they’re needed. That’s happening at the same time that demand has spiked with people loading their pantries while they stay home as much as possible.
Adding to the pressure, countries including Russia, Kazakhstan and Vietnam are moving to secure domestic supply by restricting exports that the world depends on.
Prices of fruit and vegetables, essential in providing nutrition, are also going up in many parts of the world.
The Bloomberg writers pointed out that it’s likely the supply disruptions could prove temporary, which will probably mean that wheat and rice will stabilise. In the last several years, food costs have been relatively benign thanks to plentiful supplies.