Results from the latest Global Food Security Index (GFSI) quarterly price adjustment update revealed that food affordability improved in nearly 75 percent of countries in September through November 2014 timeframe largely because of a 2.8 percent decline in global food prices, which have reached a four-year low.
In a recent release, The Economist Intelligence Unit’s (EIU) reported that all-time high production levels of corn, wheat and soybeans, and falling global oil prices have resulted in improved food security outlooks for 79 of the 109 countries in the Index. However, the full impact of cheaper oil on local consumer prices, political stability, and on the fiscal positions of oil exporters and importers will only play out in the months to come. Find the full news release here.
The quarterly affordability updates of the GFSI highlight the vulnerability of countries to food price shocks, especially for those where populations already face undernourishment. Incorporating global data and information from the Food and Agriculture Organization of the United Nations (FAO) Food Price Index, the EIU’s quarterly update adjusts for global food price changes and for movements in exchange rates, national incomes and import dependence on a country-by-country basis. This provides a top-level assessment of the impact of price changes that might help or hurt a country’s food security.
According to the FAO, global food prices have been falling since the end of August 2014, when they reached the lowest level in four years. Prices continued to decline, reaching another new four-year low in November.
- Despite significant score improvements, few countries experienced changes in their overall GFSI rankings. Denmark and Australia, however, each rose four places in the rankings, while Switzerland fell five places.
- Global food prices fell across all commodities except cereals, with dairy and sugar experiencing the most drastic declines, according to the FAO.
- Falling oil prices increased food affordability by lowering transportation costs. Increases in crude oil supply, weakening demand, and Saudi Arabia’s hands-off approach to price declines have resulted in plummeting oil prices, which will lower food transportation costs
- Hungary and Botswana experienced the greatest rank improvements—a rise of six and five places, respectively—in the food Affordability category since the last quarterly update in August
For detailed information about the latest quarterly price adjustment factor to the Global Food Security Index, please visit http://foodsecurityindex.eiu.com/.