According to a press release from the Economist Intelligence Unit, lower global food prices paired with an increase in national incomes over the past three months has resulted in an improved food security outlook for 90 percent of the 109 countries profiled in the Global Food Security Index (GFSI). The 6.5 percent decline in global food prices since the beginning of June has boosted food security, although the effects vary by country.
“Declining raw agricultural commodity prices are translating into lower food prices in the developing world. However, it will take longer for national food prices, particularly in developed economies, to decline. Food processing and transportation costs are not declining, livestock production will take some time to recover and prolonged drought conditions will increase fruit and vegetable prices,” said Steve Elmore, Chief Agricultural Economist at DuPont. “Nevertheless, farmers, globally, have risen to meet these challenges by taking advantage of new technology and management practices to increase their productivity, yielding record corn, rice, soybean and wheat crops this year.”
Global food prices in the period from June to the end of August reached the lowest level in four years, according to the Food and Agricultural Organization’s (FAO), affecting the affordability component of the index and the overall food security scores. The GFSI produced the following findings:
- Falling food prices broadly improved food affordability, and thus overall food security.
- Food affordability in high-income countries was least affected by the drop in global food prices.
- Sierra Leone experienced the largest improvement in its food security adjustment factor for this period.
- Income growth drove greater food affordability in several countries in Asia and Central & South America.
About the GFSI & Quarterly Adjustment Factor
In 2012, DuPont commissioned the Economist Intelligence Unit to create the GFSI to enhance the dialogue on food security. The GFSI is prepared annually and evaluates the affordability, availability, and quality and safety of food across 109 countries. 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 Agricultural Organization’s (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. Global food prices fell 6.5 percent from the prior quarter in the three months ending in August 2014.
To view the 2014 Index report, an interactive visualization of the Index results, and the underlying excel model and findings and methodology report for this study, visit: http://foodsecurityindex.eiu.com.