March 29, 2022

EVERYTHING IS GOING SWIMMINGLY: Rising Food Prices Could Spell Social Unrest, Demand Destruction and Less Bacon.

With the world economy already shackled by Covid-related shortages and now reeling from Russia’s invasion of Ukraine, prices of such basics as bread, meat and cooking oils have jumped across the world, sending shock waves through the commodity markets and damaging the global food system.

For the most vulnerable societies—think Yemen, which imports 90% of its food in the midst of a grinding conflict and depreciating currency—this poses a genuine risk of hunger. Elsewhere, it triggers worries about what economists call demand destruction, a phenomenon when goods get too pricey to purchase.

“The cupboards are bare,” said Julian Conway McGill, head of South East Asia at consultancy LMC International, “and consumers will have to reduce their intake.”

Food inflation is just getting started.

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