The UN's Food and Agriculture Organization (FAO) reported a 45% increase in the world food price index during the 2008 food price crisis. Similar volatility was seen in 2011 and in 2022.
Food prices change in response to various factors including speculation, climatic shocks, energy prices, demand for agrofuels, and trade policy. Oil price increases affect the price of fertilizers as well as the cost of shipping and transportation. Demand for agrofuels such as corn ethanol increases demand for particular crops and changes crop distribution. Following the 2008 financial crisis, many investors shifted funds from mortgage markets to agriculture commodities creating a demand shock that increased commodity prices. Since, speculation on food products, including so-called future commodity markets where speculators bet on future prices, has remained a major factor exacerbating price volatility.
Many low-income countries, especially the so-called Least Developed Countries, are net food importers, which makes them highly vulnerable to price volatility on global food markets.
The Oakland Institute is committed to producing rigorous research and analysis on food and agriculture as it is only an in-depth objective understanding of the problems that can lead the right solutions to find their way into on-the-ground policy.