The global challenge of food high prices

The global challenge of food high prices

From Europe to Turkey and India, politicians are providing more help in the face of rising food prices, seeking to control prices and regulate trade to offset the impact of high prices on consumers.

According to the Food and Agriculture Organization of the United Nations (FAO), world food prices rose 33 percent in August as vegetable oils, grain, and meat prices rose from a year earlier. This situation is unlikely to improve because sudden climate change, rising freight and fertilizer costs, transportation constraints, and labor shortages complicate the problem. The decline in foreign exchange reserves has also limited the ability of some countries to import food.

This situation is especially critical in Turkey. Because the increase in the price of basic goods for the Turkish consumer has reached 15% per year; With this situation, Turkey has the second-highest price increase among emerging markets and CIS countries, after Argentina.

Turkey abolished import tariffs to reduce rising food price inflation. Turkey announced the elimination of tariffs on its essential food crops such as chickpeas, lentils, wheat, rye wheat, barley, oats, and sorghum seeds for planting. Zero tariffs will apply from September 8, 2021, and will continue until December 31, 2021.

India, one of the largest malnourished populations in the world, is providing even more assistance. The government of India has distributed 67.4.2 billion rupees ($ 9.1 billion) in additional subsidies for grain, 20.4 million tonnes of rice, and free wheat, which includes more than 800 million people. The country has also implemented trade measures to protect consumers from rising global prices. The Indian government has reduced import tariffs on palm, soybean, and sunflower oils, as well as pulses.

India is not the only country that has used trade to intervene in the food market. Syria has restricted imports of goods such as cheese and peanuts to maintain foreign exchange reserves for wheat. Argentina and Bolivia have restricted beef exports to control domestic prices. Drought-stricken Kazakhstan has also banned the export of barley and fodder.

Russia, the world’s largest grain exporter, also faces restrictions on trade regulation to control prices. The country announced a wheat export tax in February, at the cost of losing market share. Russian wheat is no longer competitive, and exports to Egypt, one of Russia’s largest customers, have declined. At home, too, the measures taken have not helped curb food inflation. The price of wheat in the domestic market last month reached a record high due to the reluctance of farmers and traders to sell, which was unprecedented for this time of year.

According to the FAO, costs are now higher than at any time in the last six decades, given the inflation and annual growth they are experiencing. Food purchases are now more difficult than in the past and food is now more expensive than most of modern history.

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