International
Global economy 2023: why there will still be plenty of pressure on food prices in the year ahead
In the weeks after the war, there was talk of famine. Why hasn’t it happened?
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Welcome to this special report on the food industry, the fourth instalment in our series on where the global economy is heading in 2023. It follows recent articles on inflation, energy and the cost of living.
Shortly after Russia invaded Ukraine, the closely watched food price index of the UN Food and Agriculture Organization (FAO) reached its highest recorded level, stoking consumer prices across the world. In the UK, for example, the prices of many everyday items increased way ahead of inflation, with bread and eggs both up 18% in the year to December, and milk up 30%.
Such rises threatened food security, particularly in low and middle-income countries that rely heavily on Ukraine and Russia for grains and plant oils. That included many countries in Africa and Asia, which took 95% of Ukraine’s wheat exports in 2021 (roughly a tenth of the world supply).
Global food price inflation
This prompted much talk in the media about the potential for famine. Yet nearly a year after the invasion, the FAO food price index has returned to pre-invasion levels.
So why has pressure on prices reduced, and what are the prospects for the year ahead?
What happened in practice
You can’t look at food in isolation from COVID. Many people in the energy and food industries were either too ill to work or prevented from doing so because of pandemic restrictions, which squeezed supplies. When the world opened up and demand began to rise, food and energy prices went up too.
This made people particularly vulnerable to events in Ukraine. Once the war began, food-price inflation peaked because the markets were uncertain about whether production and exports would be hit, and how global supply chains would adapt.
Ukraine’s grain exports resumed after a UN deal was brokered in July to create a humanitarian corridor through the Black Sea. It also helped that the wheat harvest was larger than expected, even if large areas around the front line remain unharvested. Much of Ukraine’s corn has not been harvested either, for the additional reason that the drying process is energy intensive and farmers struggled to afford the raised prices. Overall, Ukraine’s grain exports were down in 2022 by about 30% year on year.
Russia is normally an even bigger exporter of wheat than Ukraine, supplying about 15% of world demand. It’s harder to see what has happened to these supplies because the Russians stopped providing data, but certainly Moscow’s policy of only dealing with “friendly” countries will have affected availability for many countries too.
Countries that rely heavily on Ukrainian/Russian grains have been forced to shop elsewhere. For example Yemen and Egypt have imported more grain from India and the EU, paying higher prices than usual.
Several additional pressures on farmers have further squeezed the global food supply. Fertiliser prices have rocketed in the past two years. Russia, an important global supplier, has been stockpiling for domestic use. Elsewhere, heightened energy prices have squeezed output. In the UK, the largest nitrogen-fertiliser facility suspended production during 2022. Average fertiliser prices for UK farmers are now 18% higher than the winter before the Ukraine invasion, and 66% higher than two years ago.
Extreme weather in summer 2022 was another problem, including heatwaves and drought in northern Europe, America and China, flooding in Pakistan and drought in Argentina. Irrigation has become more difficult in areas that depend on it, while in Europe drought conditions have reduced the supply of crops for animal feed and harvest of grass for silage. Meat and vegetable prices have both gone up as a result.
According to the UN’s World Food Programme, the overall effect of inflation, war and extreme weather has been that many people around the world have had their access to food restricted. The number of people facing severe food insecurity is up 20% since the war began.
The outlook
Wholesale gas and oil prices have at least declined from their 2022 highs, which will benefit the entire food supply chain. This is one reason why inflation eased slightly in the autumn in many countries.
Oil and gas prices
This will have taken some of the heat out of the global food price index. Cereals, meats and particularly vegetable oil prices all fell towards the end of the year, though sugar and dairy prices went in the opposite direction. Overall food price inflation remains historically high.
For the year ahead, the area of crops planted in Ukraine is estimated to be 17% down on 2022. Farmers in other countries are planting more wheat and maize to compensate, though the overall supply will still be pressured by higher farming costs and potentially more extreme weather.
Fertiliser prices will probably stay high as supplies remain restricted. Farmers in wealthier countries may keep applying normal quantities to their crops, like on previous periods of raised prices. But in poorer countries they may cut back, threatening yields and quality and exposing smallholder communities to greater food insecurity.
In sum, many staples will likely remain in tight supply in 2023, meaning price pressures continue. Retailers will be forced to either absorb the costs or pass them on to consumers. Governments will have to consider how to both support struggling consumers but also farmers to maximise what they produce.
At the international level, there needs to be an urgent fertiliser supply agreement to minimise disruptions, prioritising access for vulnerable communities in developing countries. Longer term, farming needs to reduce its dependency on fertilisers by developing agricultural practices that optimise the cycling of nutrients.
This includes more efficient use of manures and extracting nutrients from sewage, and using more legume crops in rotations to take advantage of the fact that they enhance nutrients in the soil. There also needs to be more precision farming techniques to target resources within fields to where they will be used most efficiently.
These practices are well adopted in western countries, but other parts of the world lag behind – particularly developing countries. Fertilisers will always be part of the farming system, but we’ll make food production more sustainable if we can get these things right.
This article is part of Global Economy 2023, our series about the challenges facing the world in the year ahead. You might also like our Global Economy Newsletter, which you can subscribe to here.
John Hammond receives funding from UKRI and the EU Horizon Europe program.
Yiorgos Gadanakis receives funding from UKRI, HORIZON 2020.
oil pandemic africa india europe uk russia ukraine eu china
International
Fuel poverty in England is probably 2.5 times higher than government statistics show
The top 40% most energy efficient homes aren’t counted as being in fuel poverty, no matter what their bills or income are.
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The cap set on how much UK energy suppliers can charge for domestic gas and electricity is set to fall by 15% from April 1 2024. Despite this, prices remain shockingly high. The average household energy bill in 2023 was £2,592 a year, dwarfing the pre-pandemic average of £1,308 in 2019.
The term “fuel poverty” refers to a household’s ability to afford the energy required to maintain adequate warmth and the use of other essential appliances. Quite how it is measured varies from country to country. In England, the government uses what is known as the low income low energy efficiency (Lilee) indicator.
Since energy costs started rising sharply in 2021, UK households’ spending powers have plummeted. It would be reasonable to assume that these increasingly hostile economic conditions have caused fuel poverty rates to rise.
However, according to the Lilee fuel poverty metric, in England there have only been modest changes in fuel poverty incidence year on year. In fact, government statistics show a slight decrease in the nationwide rate, from 13.2% in 2020 to 13.0% in 2023.
Our recent study suggests that these figures are incorrect. We estimate the rate of fuel poverty in England to be around 2.5 times higher than what the government’s statistics show, because the criteria underpinning the Lilee estimation process leaves out a large number of financially vulnerable households which, in reality, are unable to afford and maintain adequate warmth.
Energy security
In 2022, we undertook an in-depth analysis of Lilee fuel poverty in Greater London. First, we combined fuel poverty, housing and employment data to provide an estimate of vulnerable homes which are omitted from Lilee statistics.
We also surveyed 2,886 residents of Greater London about their experiences of fuel poverty during the winter of 2022. We wanted to gauge energy security, which refers to a type of self-reported fuel poverty. Both parts of the study aimed to demonstrate the potential flaws of the Lilee definition.
Introduced in 2019, the Lilee metric considers a household to be “fuel poor” if it meets two criteria. First, after accounting for energy expenses, its income must fall below the poverty line (which is 60% of median income).
Second, the property must have an energy performance certificate (EPC) rating of D–G (the lowest four ratings). The government’s apparent logic for the Lilee metric is to quicken the net-zero transition of the housing sector.
In Sustainable Warmth, the policy paper that defined the Lilee approach, the government says that EPC A–C-rated homes “will not significantly benefit from energy-efficiency measures”. Hence, the focus on fuel poverty in D–G-rated properties.
Generally speaking, EPC A–C-rated homes (those with the highest three ratings) are considered energy efficient, while D–G-rated homes are deemed inefficient. The problem with how Lilee fuel poverty is measured is that the process assumes that EPC A–C-rated homes are too “energy efficient” to be considered fuel poor: the main focus of the fuel poverty assessment is a characteristic of the property, not the occupant’s financial situation.
In other words, by this metric, anyone living in an energy-efficient home cannot be considered to be in fuel poverty, no matter their financial situation. There is an obvious flaw here.
Around 40% of homes in England have an EPC rating of A–C. According to the Lilee definition, none of these homes can or ever will be classed as fuel poor. Even though energy prices are going through the roof, a single-parent household with dependent children whose only income is universal credit (or some other form of benefits) will still not be considered to be living in fuel poverty if their home is rated A-C.
The lack of protection afforded to these households against an extremely volatile energy market is highly concerning.
In our study, we estimate that 4.4% of London’s homes are rated A-C and also financially vulnerable. That is around 171,091 households, which are currently omitted by the Lilee metric but remain highly likely to be unable to afford adequate energy.
In most other European nations, what is known as the 10% indicator is used to gauge fuel poverty. This metric, which was also used in England from the 1990s until the mid 2010s, considers a home to be fuel poor if more than 10% of income is spent on energy. Here, the main focus of the fuel poverty assessment is the occupant’s financial situation, not the property.
Were such alternative fuel poverty metrics to be employed, a significant portion of those 171,091 households in London would almost certainly qualify as fuel poor.
This is confirmed by the findings of our survey. Our data shows that 28.2% of the 2,886 people who responded were “energy insecure”. This includes being unable to afford energy, making involuntary spending trade-offs between food and energy, and falling behind on energy payments.
Worryingly, we found that the rate of energy insecurity in the survey sample is around 2.5 times higher than the official rate of fuel poverty in London (11.5%), as assessed according to the Lilee metric.
It is likely that this figure can be extrapolated for the rest of England. If anything, energy insecurity may be even higher in other regions, given that Londoners tend to have higher-than-average household income.
The UK government is wrongly omitting hundreds of thousands of English households from fuel poverty statistics. Without a more accurate measure, vulnerable households will continue to be overlooked and not get the assistance they desperately need to stay warm.
Torran Semple receives funding from Engineering and Physical Sciences Research Council (EPSRC) grant EP/S023305/1.
John Harvey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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Looking Back At COVID’s Authoritarian Regimes
After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked,…
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After having moved from Canada to the United States, partly to be wealthier and partly to be freer (those two are connected, by the way), I was shocked, in March 2020, when President Trump and most US governors imposed heavy restrictions on people’s freedom. The purpose, said Trump and his COVID-19 advisers, was to “flatten the curve”: shut down people’s mobility for two weeks so that hospitals could catch up with the expected demand from COVID patients. In her book Silent Invasion, Dr. Deborah Birx, the coordinator of the White House Coronavirus Task Force, admitted that she was scrambling during those two weeks to come up with a reason to extend the lockdowns for much longer. As she put it, “I didn’t have the numbers in front of me yet to make the case for extending it longer, but I had two weeks to get them.” In short, she chose the goal and then tried to find the data to justify the goal. This, by the way, was from someone who, along with her task force colleague Dr. Anthony Fauci, kept talking about the importance of the scientific method. By the end of April 2020, the term “flatten the curve” had all but disappeared from public discussion.
Now that we are four years past that awful time, it makes sense to look back and see whether those heavy restrictions on the lives of people of all ages made sense. I’ll save you the suspense. They didn’t. The damage to the economy was huge. Remember that “the economy” is not a term used to describe a big machine; it’s a shorthand for the trillions of interactions among hundreds of millions of people. The lockdowns and the subsequent federal spending ballooned the budget deficit and consequent federal debt. The effect on children’s learning, not just in school but outside of school, was huge. These effects will be with us for a long time. It’s not as if there wasn’t another way to go. The people who came up with the idea of lockdowns did so on the basis of abstract models that had not been tested. They ignored a model of human behavior, which I’ll call Hayekian, that is tested every day.
These are the opening two paragraphs of my latest Defining Ideas article, “Looking Back at COVID’s Authoritarian Regimes,” Defining Ideas, March 14, 2024.
Another excerpt:
That wasn’t the only uncertainty. My daughter Karen lived in San Francisco and made her living teaching Pilates. San Francisco mayor London Breed shut down all the gyms, and so there went my daughter’s business. (The good news was that she quickly got online and shifted many of her clients to virtual Pilates. But that’s another story.) We tried to see her every six weeks or so, whether that meant our driving up to San Fran or her driving down to Monterey. But were we allowed to drive to see her? In that first month and a half, we simply didn’t know.
Read the whole thing, which is longer than usual.
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Problems After COVID-19 Vaccination More Prevalent Among Naturally Immune: Study
Problems After COVID-19 Vaccination More Prevalent Among Naturally Immune: Study
Authored by Zachary Stieber via The Epoch Times (emphasis…
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Authored by Zachary Stieber via The Epoch Times (emphasis ours),
People who recovered from COVID-19 and received a COVID-19 shot were more likely to suffer adverse reactions, researchers in Europe are reporting.
Participants in the study were more likely to experience an adverse reaction after vaccination regardless of the type of shot, with one exception, the researchers found.
Across all vaccine brands, people with prior COVID-19 were 2.6 times as likely after dose one to suffer an adverse reaction, according to the new study. Such people are commonly known as having a type of protection known as natural immunity after recovery.
People with previous COVID-19 were also 1.25 times as likely after dose 2 to experience an adverse reaction.
The findings held true across all vaccine types following dose one.
Of the female participants who received the Pfizer-BioNTech vaccine, for instance, 82 percent who had COVID-19 previously experienced an adverse reaction after their first dose, compared to 59 percent of females who did not have prior COVID-19.
The only exception to the trend was among males who received a second AstraZeneca dose. The percentage of males who suffered an adverse reaction was higher, 33 percent to 24 percent, among those without a COVID-19 history.
“Participants who had a prior SARS-CoV-2 infection (confirmed with a positive test) experienced at least one adverse reaction more often after the 1st dose compared to participants who did not have prior COVID-19. This pattern was observed in both men and women and across vaccine brands,” Florence van Hunsel, an epidemiologist with the Netherlands Pharmacovigilance Centre Lareb, and her co-authors wrote.
There were only slightly higher odds of the naturally immune suffering an adverse reaction following receipt of a Pfizer or Moderna booster, the researchers also found.
The researchers performed what’s known as a cohort event monitoring study, following 29,387 participants as they received at least one dose of a COVID-19 vaccine. The participants live in a European country such as Belgium, France, or Slovakia.
Overall, three-quarters of the participants reported at least one adverse reaction, although some were minor such as injection site pain.
Adverse reactions described as serious were reported by 0.24 percent of people who received a first or second dose and 0.26 percent for people who received a booster. Different examples of serious reactions were not listed in the study.
Participants were only specifically asked to record a range of minor adverse reactions (ADRs). They could provide details of other reactions in free text form.
“The unsolicited events were manually assessed and coded, and the seriousness was classified based on international criteria,” researchers said.
The free text answers were not provided by researchers in the paper.
“The authors note, ‘In this manuscript, the focus was not on serious ADRs and adverse events of special interest.’” Yet, in their highlights section they state, “The percentage of serious ADRs in the study is low for 1st and 2nd vaccination and booster.”
Dr. Joel Wallskog, co-chair of the group React19, which advocates for people who were injured by vaccines, told The Epoch Times: “It is intellectually dishonest to set out to study minor adverse events after COVID-19 vaccination then make conclusions about the frequency of serious adverse events. They also fail to provide the free text data.” He added that the paper showed “yet another study that is in my opinion, deficient by design.”
Ms. Hunsel did not respond to a request for comment.
She and other researchers listed limitations in the paper, including how they did not provide data broken down by country.
The paper was published by the journal Vaccine on March 6.
The study was funded by the European Medicines Agency and the Dutch government.
No authors declared conflicts of interest.
Some previous papers have also found that people with prior COVID-19 infection had more adverse events following COVID-19 vaccination, including a 2021 paper from French researchers. A U.S. study identified prior COVID-19 as a predictor of the severity of side effects.
Some other studies have determined COVID-19 vaccines confer little or no benefit to people with a history of infection, including those who had received a primary series.
The U.S. Centers for Disease Control and Prevention still recommends people who recovered from COVID-19 receive a COVID-19 vaccine, although a number of other health authorities have stopped recommending the shot for people who have prior COVID-19.
Another New Study
In another new paper, South Korean researchers outlined how they found people were more likely to report certain adverse reactions after COVID-19 vaccination than after receipt of another vaccine.
The reporting of myocarditis, a form of heart inflammation, or pericarditis, a related condition, was nearly 20 times as high among children as the reporting odds following receipt of all other vaccines, the researchers found.
The reporting odds were also much higher for multisystem inflammatory syndrome or Kawasaki disease among adolescent COVID-19 recipients.
Researchers analyzed reports made to VigiBase, which is run by the World Health Organization.
“Based on our results, close monitoring for these rare but serious inflammatory reactions after COVID-19 vaccination among adolescents until definitive causal relationship can be established,” the researchers wrote.
The study was published by the Journal of Korean Medical Science in its March edition.
Limitations include VigiBase receiving reports of problems, with some reports going unconfirmed.
Funding came from the South Korean government. One author reported receiving grants from pharmaceutical companies, including Pfizer.
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