Global food prices rise to highest level in a decade
Abdolreza Abbassian, Senior Economist for the UN Food and Agriculture Organization, joins Yahoo Finance Live to discuss the surge in global food prices.
- Global food prices rose for the 12th month in a row in May, up nearly 40% year over year. That's according to the United Nations food price index. In fact, last month was the sharpest monthly rise in average food prices in over a decade spiking nearly 5% just from April to May. Here to talk about it is Abdolreza Abbassian, senior economist for the UN Food and Agriculture Organization. Abdolreza, thank you so much for joining us. We should mention that you are in Rome, Italy right now. Tell us why you are seeing this surge in food prices globally.
ABDOLREZA ABBASSIAN: Thank you for having me. Well, prices have been going up every month for the last 12 months. And as your audience knows better, like any commodity you are in the hands of supply and demand. So when there is an imbalance one way or another prices respond. We started off a year ago with, I would say, quite good supply. I'm talking very general because when we say food you know we have to give the specifics about which food we mean. But generally speaking, I think, food supplies are adequate, and in fact still are. But what happened here is that trade proved to be far stronger and far more robust than many people expected.
In fact, with COVID there was speculation that trade could come to a halt. Well none of that really happened. And in fact, the trade started to, trade flows, you know, sparing the first few months a little bit of anxiety over perhaps the logistical issues. Once those things passed, we saw trade expanding very fast and countries coming and buying. And this buy at the beginning was also a little bit, I would say, speculative. Some countries were worried what about if tomorrow I cannot get my food, so let me buy a bit more now. And that gave a bit of a, you know, market sentiment became a bit more bullish. So let's buy earlier, buy earlier.
